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Dealerships across Canada are losing anywhere from 10% – 50% of their factory order sales.  Although there are situations where vehicles are delayed for prolonged and unreasonable wait times, the fact of the matter is that most factory order cancellations (by customers) are preventable.  Let’s explore the reasons for cancellations as well as potential solutions.

Factory Order are not being SOLD with enthusiasm, conviction and a sales process.  “Well, you know you will to have to factory order that sir (sigh).”  “Don’t worry, if we factory order a vehicle for you and if (when it arrives) you decide that don’t want it, you don’t have to take it – we can sell it to someone else – and your deposit is fully refundable – and you only need to give us $500 to place the order.”  These are the statements and conversations between Sales Consultants and customers all across Canada.  I refer to this as “UNSELLING”.  Many Sales Consultants are spending more time instructing customers as to how they can get out of a factory order versus selling the vehicle, the brand and the dealership. 

Solution.

Dealerships need to STOP wimpy conversations about getting out of deals and replacing them with unabashed, enthusiastic salesmanship.  Make factory orders “sexy” for your customers; “Mr. Lee, we are going CUSTOM-ORDER your vehicle like a bespoke, London suit.  It will be the exact trim level, features, accessories and colour that you want.  When your order is received at our manufacturing facility, a team of professionals will see your name and your tailor-made vehicle order will come up on their screen – and the work will begin on your vehicle.  As a Sales Consultant, I love being able to give our customers exactly what they want!”

We can still provide an INCREDIBLE purchase experience – even for a factory order.  The following is an example of a FACTORY ORDER Sales Process (when you have no vehicles on-ground to present and demonstrate).  If you would like more detail in the form of a document, e-mail me.

• WELCOME
• TRADE-IN APPRAISAL
• DISCOVERY and RELATIONSHIP
• SALES MANAGER EARLY INTRODUCTION
• WHY ORDER FROM US
• FINANCE/LEASE PRE-APPROVAL SERVICE
• VIRTUAL VEHICLE PRESENTATION
• DEALERSHIP TOUR
• PAYMENT OPTIONS
• FINANCIAL SERVICES
• CUSTOMER COMMUNICATION

Sales Consultants don’t get paid for months.  Many Sales Consultants have shared with me that it’s difficult to get excited about selling a new vehicle when they know they’re going to have to wait 3 – 12 months to get paid for it.  Yes, we all tell them that it’s “money in the bank”, “something to look forward to”, etc.  However, many Sales Consultants are wired for instant gratification – they want it now, whether they need it or not.  Others live much more hand-to-mouth and feel stressed waiting for commissions when bills are pressing.

Solution.

Many dealerships are paying flat commissions of $200, $300 or even $400 at time of vehicle sale with the balance (if any) paid out at time of vehicle delivery.  Some dealerships are even paying as much as half of the payable commission at time of vehicle sale. 

Also remember that most Sales Consultants crave recognition as much as or even more than money.  Hence, if you have a traditional sticker board in the Sales Manager’s office or meeting room that tracks vehicle DELIVERIES, change the board.  Beside each Sales Consultant’s name, have a row of stickers for SALES (including factory orders) and a second row for DELIVERIES.  As overly simplistic as this sounds, many Sales Consultants get down or defensive when the sticker board is shy of deliveries, yet they may have sold significant factory orders (and it is not being recognized on the board).  I also witness dealerships excitedly delivering vehicles coming off the transport from factory orders and the atmosphere is jubilant.  However, the dealership and Sales Consultants are distracted with deliveries and not filling the pipeline by selling new vehicles this month.

Factory Order deposits are too little.

Deposits for factory orders are commonly $500. Wait, what, $500?!  Deposits were $500 when I began selling cars in 1986!  Why is the retail auto industry so timid and afraid to ask for a real commitment in the form of a substantial deposit (yes, I am aware that some provinces have percentage maximums, etc., but we don’t even ask for those!).  Home sales often ask for deposits of 10% or more of the selling price just to accompany an offer.  In the retail automotive industry, a $500 deposit often represents 1% (or less) of the purchase price.  Deposits are about creating a psychological commitment to a purchase.  Many customers will walk away from a $500 deposit at the drop of a hat if they see a vehicle on-ground and available at a nearby competitor.  What’s worse, if only a $500 deposit, they will often not only forfeit the $500 deposit, but not even tell the Sales Consultant that they actually bought a car elsewhere.  If a customer provides a deposit of $3,000 or $2,000, or whatever seems real and current, at the very least, they would be forced to come to the dealership to request and explain why they want their deposit refunded – and whenever Sales Consultants and Sales Managers have the opportunity to meet customers face-to-face, deals are SAVED! Forgive me, but what’s the old expression, “Money talks, bulls#*t walks”?  Consider re-examining your dealership attitude and policy with respect to deposits, not only on factory orders, but on all deals.

Financial Services Managers are not meeting Factory Order customers at time of vehicle sale.  The rationale for this is that the dealership may not have the new 2023 vehicle pricing or a stable interest rate.  Financial Services Managers also fear that if they take a turnover at time of vehicle sale and successfully sell products/services, that it gives the customer too much time to think, talk to friends and family, and ultimately cancel product that were sold.

Solution.

Financial Services Managers need to meet customers at time of vehicle sale. When customers meet a friendly, professional and enthusiastic Financial Services Manager at time of vehicle sale, it serves to FIRM the commitment; the customer is buying a car!  The Financial Services Manager should meet with the customer in their office like any other customer and make them feel like a V.I.P. – big THANK YOU’s and big CONGRATULATIONS!  The Financial Services Manager should explain (in detail) the factory order process including WHEN and HOW the dealership will communicate to provide information and updates. 

This is also an excellent time to complete the credit application.  Some dealerships will choose to complete it at this time, but submit it closer to the actual delivery time to accommodate for changing interest rates, etc.  If Financial Services Managers are concerned about selling products and subsequent cancellations, they can choose not to sell their products/services at this time and (instead) meet the customers a second time at time of vehicle arrival/delivery.  Selling becomes much easier, because the customer already met and established a relationship with the Financial Service Manager at time of vehicle sale.

Sales Consultants are not staying in touch and updating Factory Order customers.  Many Sales Consultants have poor organizational skills and simply forget to stay in touch with factory order customers.  Others do not see the need to stay in touch if there are no updates.  And of course, others are walking on eggshells; “I made a huge gross on this deal – I don’t want to talk to him!”.  Other Sales Consultant do not want to contact a customer for fear of disappointing them or worse, having them cancel.

Solution.

Decide HOW OFTEN to contact factory order customers to provide updates.  As a dealership, do you want to contact customers weekly, bi-weekly or monthly?  Do you want to contact them by phone, text, e-mail or a combination?  What is the nature of the contact?  For example, often there is no news.  In this situation the contact may simply be a Sales Consultant phone call to deliver no news; e.g.: “Hi Mr. Lee, it’s Chris Wiseman from Langley Chrysler.  I don’t have any new information with respect to the delivery time of your new 2023 RAM Sport, however, I wanted to stay in touch – and let you know that I am watching our factory order status reports on a daily basis and that (of course) I am eagerly tracking yours.”

Sales Consultants are afraid to contact Factory Order customers.

Earlier this year I was facilitating a large seminar for Sales Consultants and Sales Managers.  Just a few minutes before the start of the seminar, several Sales Consultants near the front of the room began to panic.  They had just received word that there was a $3,500 price increase on their best-selling pick-up truck and that the increase was retroactive and included all factory orders in the system.  Each Sales Consultant had 10 or more factory orders and they were stressing about making the phone calls and texts to their customers to inform them of the price increase; their entire day was ruined.  Although factory orders are now a permanent and bigger part of our business, the fact is that the majority of Sales Consultants are afraid of the uncertainty, and often bad news associated with factory orders; no 2023 pricing, interest rate increases, vehicles arriving at dealerships with missing equipment and of course, the inevitable delays.  When these situations arise and customers need to be contacted and updated, not only do Sales Consultants dread or delay making these contacts, many simply don’t do it.  Sales Managers are often under the impression that factory order customers have been updated on a monthly basis by their Sales Consultants with respect to the status of their vehicle.  In many situations, customers have had no contact whatsoever since the date of placing their order.  Some customers even reach out to the Sales Consultants seeking news, but their inquiries go unanswered.  When this occurs, many customers simply walk away from their deal (and deposit) and buy a new vehicle elsewhere.

Solution.

If 2023 pricing is significantly higher than anticipated, if interest rates increase, if vehicles arrive at the dealership with missing equipment and if there are delays, instead of having Sales Consultants make these unpleasant customer contacts, make it a policy to have Sales Managers make the contacts instead.  If Sales Consultants associate factory orders with potential problems and upset customers, then they will lose their desire to sell them – this is already occurring.  If, however, the Sales Consultant can hand over the unpleasant part to the Sales Manager, they will not be apprehensive, or worse, dismissive with respect to selling factory orders.  When Sales Managers make these difficult calls, customers appreciate the proactive initiative and the fact that the Sales Manager took the time to personally make the contact.  Most importantly, when Sales Managers make the calls, deals are SAVED! 

Chris Schulthies is the president of Toronto-based Wye Management.  Wye Management provides sales and management training (showroom and digital) for dealerships, dealer groups, OEMs and industry suppliers in Canada and the U.S.

cschulthies@wyemanagement.com

Various industry studies indicate that the average sales manager is spending up to 80% of their time in NON-sales related activities, juggling up to 30 or more tasks in any given week.  Most are inundated with more administrative duties and paperwork than ever in the history of the retail car business while also mastering numerous technologies; DMS’s, CRM’s, desking tools, appraisal tools, etc.  Many of today’s sales managers have evolved to become sales administrators and no longer know what the job of a sales manager truly is, or the priorities of the job.  Many of these same sales managers often possess outstanding leadership, coaching and deal-making skills that are being underutilized and waiting to be unleashed.  Do you really want people in leadership positions stocking in vehicles, commissioning deals, doing dealer trades and the plethora of other mundane tasks that keep them chained to a desk and shooing away sales consultants?

As a dealer principal or general manager consider conducting a sales manager audit; identify and list all the various tasks that your sales manager currently attends to in a given day or week.  One dealer principal directed his sales manager to NOT do any paperwork, reports, administration for one full week and to simply pile the files/documents on the dealer principals’ desk.  The dealer principal was astounded as to the size of his dealership’s “paper monster” that was sitting on his sales manager’s shoulders week in and week out.  Determine how many of these tasks are administrative versus those that directly work with sales consultants and help drive sales.  Could some of these tasks and accompanying paperwork be moved to someone else in the organization who may be eager to learn and take them on?  Is it time to hire an actual sales administrator/assistant?  Is it time to hire an additional sales manager?  As a dealer principal or general manager, what do you want your sales managers doing each day?  Have you coached them and helped them establish, prioritize and implement their most important daily tasks – those that actually help sell cars?

Below is an example of the 5 daily sales managers tasks/priorities.  You may not necessarily agree with all of the priorities or the order based on the size and structure of your dealership, however the list may provide a catalyst for thought, discussion and action.  

1. Facilitate a 10 – 20-minute Morning Huddles (every day):

• Announce/review business updates such as manufacturer’s incentives,

dealership promotions, month-to-date dealership performance/targets.

Walk the pre-owned vehicle lot with the team to showcase fresh vehicle 

arrivals.

• Share a success story from the previous day; a sales consultant victory,                          

a prospected customer-appointment that purchased, a 5-star Google                   

Review, etc.

• Deliver a thought-provoking or motivating message or facilitate a brief                       learning; role-play presenting a proposal, overcoming a common                              objection (“I want to think about it”), a Vehicle Exchange prospecting                    telephone call, etc.

• Conduct daily Make-A-Deal (MAD) Meetings

• Meet with other sales manager(s) for a daily Make-A-Deal Meeting.  Review, develop a strategy and CONTACT (telephone, text and e-mail) each and every unsold customer (NOW!) starting with customers that have visited the dealership within the past 24 hours.  Convert contacts to showroom appointments. Note: if you want to increase your “be-back” ratio and sell more cars, sales managers should make follow-up calls of unsold customers, not sales consultants.

• Conduct Mini One-On-One’s with the sales consultants at their work stations

This is designed to be 5 to 10 minutes each day (think speed-dating) to help sales consultants get their day (or shift) started in a supportive and productive manner.

• Re-confirm today/tomorrow’s customer appointments.
• Discuss and develop a strategy for incoming customer appointments.                              Check vehicles to be presented for cleanliness, fuel, etc.
• Assist and coach the implementation of a minimum of one business development initiative (social media prospecting, etc.).
• Establish productive sales consultant activities for today.

• Meet Customers within 10 minutes of their arrival in the 

dealership

Sales managers should act as an ambassador of your dealership and meet every single customer within 10 minutes of their arrival to your dealership.  For decades we have understood the concept of sales managers meeting customers before they leave the dealership in an attempt to close the sale (the t.o.). This however, is not as effective as it once was unless the sales manager has already established a relationship with the customer earlier in their visit.

• People feel “special” and appreciated when they meet the boss (early).
• Sales managers are often skilled at quickly learning about the customer, their needs and wants and pointing the sale in the right direction (early).
• Sales managers are often (through experience and instinct) able to determine (early) that a customer is indeed ready to purchase today.
• Most dealerships do not have their sales managers meet customers early in their visit, hence it become a competitive advantage.

• Assist to Close Sales on the showroom floor 

• Sales managers are not always the most skilled “closers” in the dealership, nor do they need to be. The simple act of a sales manager getting involved to help a sales consultant close a sale (unequivocally) improves the dealership’s closing ratio and customer experience; customers will often acquiesce to the “boss”, or confess as to what their concerns or objections are with respect to moving forward.  Sales managers are often able to deftly determine why a customer is not buying (today) and able to brainstorm and facilitate solutions.  Moreover, sales consultants appreciate, respect and admire those sales managers that are always willing to jump into a sale to help them succeed.

“Sales Manager” in not a title.  It is action and example.  The more a sales manager is out from behind a desk and working with their sales team and customers on the showroom floor, the more effective they will be in improving sales, gross profit, sales consultant development and sales consultant retention.

Chris Schulthies is the president of Toronto-based Wye Management. Wye Management provides sales and management training (showroom and digital) for dealerships, dealer groups, OEMs and industry suppliers in Canada and the U.S.

cschulthies@wyemanagement.com

The Gray Whale, the White Rhinoceros and the Siberian Tiger were once on the endangered list and have been miraculously saved from extinction.  The vehicle presentation is now on the endangered list.  For decades, a vehicle presentation has been the staple of almost any showroom sales process, if not the main event.  Yet over the past few years it has diminished, and in many dealerships it has disappeared completely.  Let’s explore the four reasons and why it should be saved.

1 } Customers are well-researched and already know everything there is to  

       know    about their choice of vehicle.

True, customers are highly informed, maybe over-informed.  They have done so much research that many are confused or overwhelmed.  Customers may be able to recite the list of features included in their choice of package/trim, but may not know exactly what those features do.  They may also be confused by the half a dozen or so names for the same feature (how many names does blind-spot monitoring have?).  A vehicle presentation takes the customer’s research, simplifies it and helps the customer to take the information offline and relate it to a real vehicle.  More importantly, successful sales consultants possess impressive product knowledge; information that increases the customer’s appreciation and understanding of the vehicle aiding in their decision-making process.

2 } Vehicle presentations are too long and customers will not spend the time.

In the 1980’s, manufacturer’s head offices would courier VHS training tapes to their dealerships of new vehicle WALK-AROUND presentations facilitated by product trainers.  The presentations were generally 30 to 45 minutes in length and technically brilliant.  In the age of the internet, customers may no longer have the willingness or patience to participate in a 30 to 45-minute vehicle presentation.  As a result, many dealerships have abandoned vehicle presentations altogether.  Today’s customer may not want a 30 to 45-minute vehicle presentation, but what about an EXPRESS vehicle presentation that is 8 to 10 minutes?

3 } Many sales consultants do not know what a vehicle presentation is                                 

      or do not know how to facilitate one.

If they don’t know what a vehicle presentation is, they can hardly be blamed for not facilitating them.  To be fair, many sales managers also do not know what a well-crafted vehicle presentation of today looks and feels like.  In many dealerships, vehicle presentations are not taught, trained, encouraged, rewarded and enforced as part of a modern customer purchase experience.  This training module in our Entry Level and Sales Champion workshops is often the most valued by participating sales consultants.

A modern EXPRESS vehicle presentation is an 8 – 10 minute integral part of a dealership sales process that includes the following baseline components:

1. A sales consultant-guided presentation with a customer in a 360 degree format, circumventing the vehicle.  This could take place on the showroom floor, on the lot or at a scenic driver-change point during a vehicle demonstration drive (and should not be confused with the demonstration drive itself).   

• A presentation of the FEATURES, ADVANTAGES and BENEFITS at 5 or 6                      pre-determined points around the selected vehicle specifically tailored to the interests and lifestyle of the customer.

• Customer INVOLVMENT by asking for their opinions and feedback.

• Customer INTERACTION with the vehicle; running hands across smooth paint surfaces and interior fabrics – opening and closing trunks, tailgates, hoods and doors, storage compartment, – sliding and folding down rear seats, etc.

• Sharing of vehicle and manufacturer AWARDS and ACCOLADES.

• Sharing of interesting FACTS and TRIVIA about the dealership and manufacturer.

• Sharing of a strong WHY BUY FROM US message; every dealership has impressive customer conveniences, services and programs.

A modern EXPRESS vehicle presentation INFORMS the customer and BUILDS VALUE in the vehicle.  This may state the obvious, however, there has been an explosion of vehicle safety, driving, comfort and convenience technology in just the last 3 years.  What the industry might already take for granted, is fresh, exciting and AWE INSPIRING to our customers! 

A vehicle presentation ENTERTAINS and ENGAGES through vehicle knowledge (tailored to the customer’s lifestyle), enthusiasm and energy.  It moves a customer from a logical state of mind to an EMOTIONAL state of mind, allowing the customer to see the vehicle as something they WANT to own… NOW!  It moves a customer to action!

A vehicle presentation DIFFERENTIATES the sales consultant and dealership from competitors.  Because many dealerships do not treat the customer to a vehicle presentation, this makes a dealership stand-out.  Customers will often reward the dealership simply because of the time, effort and energy spent.

A vehicle presentation is a defining element of an informative, enjoyable and exciting PURCHASE EXPERIENCE.

A vehicle presentation can be facilitated with social distancing and customer safety.  In a new era that will see a growing number of unaccompanied demonstration drives, the EXPRESS vehicle presentation represents the opportunity for social connection with customers, relationship building and the absolute necessity to share important and incredible product knowledge and features.

Some of Canada’s most successful dealer groups have placed a spotlight on this truly important aspect of the sale.  This may save the vehicle presentation from extinction and have it be an integral part of the purchase experience in the next chapter of the post COVID world.   

Chris Schulthies is president of Toronto-based Wye Management. Wye Management provides sales and management training (showroom and digital) for dealerships, dealer groups, OEMs and industry suppliers in Canada and the U.S.

cschulthies@wyemanagement.com

The vast majority of test drives in Canada do not have a sales consultant present in the vehicle.  Is this considered “great salesmanship” or a new habit and a dull laziness brought on by the pandemic and current inventory shortages?  Obviously, we could not and did not have sales consultants and customers together in vehicles during the pandemic, but what about today?  Yes, I also know that we do not always have a vehicle to demonstrate as a result of inventory challenges.  However, what about representative new vehicles and pre-owned vehicles?

I am constantly told in my travels that customers prefer unaccompanied test drives, yet nowhere, and I mean nowhere can I find the research that substantiates this.  Moreover, I work with dealerships all across Canada and the U.S. and I am often working at showroom level and talking to customers directly.  Almost never have I received pushback or refereed a negative experience when a skilled sales consultant treats a customer to a “dynamic” test drive.  Small town dealerships tell me that they are more “relaxed” and that customers expect unaccompanied test drives.  Is this because they have never experienced something so much better?  Most often the source of this bad intel are sales consultants that, for a variety of reasons, do not want to accompany their customer on a well planned, scenic, exciting and informative test drive.               If your dealership’s sales consultants are simply tossing keys to customers and telling them to, “take it for a boot”, and worse, with no walkaround vehicle presentations, what is the point of even having sales consultants and paying out record commissions?

Many sales consultants and even sales managers accept or believe that customers should take the vehicle out on their own as the new norm.  Far beyond the need to protect the vehicle, we need to be with customers during the test drive.  We need to be there to provide a proper (and safe) vehicle orientation, to build value, to answer questions, to build a relationship, trust, credibility and to ensure that customers actually drive far enough to enjoy the vehicle, soak it in and take mental ownership.

Customers that take vehicles out unaccompanied usually don’t take it far enough to familiarize themselves with it and to take the time to enjoy it.  

They feel that the dealership or sales consultant is doing them a favour by letting them take the vehicle on their own and hence they only take it out for a very short time as not to appear rude or ungrateful for the privilege.  Furthermore, many customers that take a vehicle out alone will only take it out for a short drive because they are nervous with respect to the operation of the vehicle; “Where is the temperature control?”, “How do I change the radio station?”, Where is the telescopic steering lever?”, “How does the Apple Car Play® work?”, etc.   And, in some cases customers that go out alone with the vehicle will actually use it to visit and shop other dealerships nearby.  There have even been numerous incidents of people speeding, off-roading or using a pick-up truck to move a fridge or furniture.  And of course, there is also the concern of vehicle theft.

More importantly, the entire flow of the sales is broken by the absence of the sales consultant.

For many customers getting behind the wheel of a new 2022 gas, hybrid or electric vehicle is like getting behind the yoke of a Boeing 777.  It is overwhelming and can be nerve-racking.  The technology is changing and adding so quickly; would customers really know how to self-teach, operate or understand adaptive cruise control, lane departure warning, reverse brake assist, automatic emergency braking, park assist, safe self exit, Apple Car Play©/Android Auto, wireless smart phone connectivity, teen driver tech, etc., etc., etc.?

As trucks and SUV’s go upmarket, is it really delivering a “luxury-premium experience” tossing the keys to a customer that is spending $85,000 on a pick-up truck?  Again, I am keenly aware that because of low current inventory levels it is a seller’s market and that we don’t always have to try hard to sell a new vehicle.  Does the Four Seasons Hotel deliver a lesser client experience when the hotel is sold-out?  

Beyond showcasing the vehicle’s newest safety, performance and convenience technologies, an accompanied test drive also provides the necessary time for a sales consultant to forge a trusting relationship with the customer and go deeper with a true understanding of their wants and needs.  Being present in the vehicle also allows the sales consultant to gauge the customer’s level of interest and enthusiasm and answer questions.  Many high performing sales consultants also begin the trial closing process toward the end of the test drive in order to firm up the vehicle selection and to prepare the customer for the closing phase of the sale. 

10 Concepts that constitute well-designed test drives:

1 } Create at least 2 routes to account for local traffic flow.  The dealership 

      should create and map the routes to ensure that you always know where  

      your people and vehicles are at all times.

2 } Vary the length the routes; routes should vary from 30 to 60 minutes  

      Customers do in fact want longer drives, not shorter.  Provide options.  

3 } Create scenic routes; Express Route, Adventure Route, Luxury Route.   

      Showcase your vehicles and your local scenery; include country roads, parks,  

      golf courses, ponds, lakes, oceans, marinas, hills, mountains, upscale

      neighbourhoods, cityscapes.  Imagine that you are creating the backdrop for

      a national television commercial.  Create the dream! 

4 } The sales consultant should drive first to establish the route and acclimatize 

       the customer to the new cabin environment.

5 } The sales consultant should creatively and safely demonstrate 4 – 6 new 

      vehicle technologies of the “live” vehicle; those that are of interest/curiosity 

      to the customers and those that are new to the industry. 

6 } Establish quiet, scenic and safe driver change points.  Weather permitting,  

      this can also be an opportunity to complete an express walkaround vehicle  

      presentation.  Also take photos or video of the customer with the vehicle 

      and e-mail following the dealership visit.

7 } Encourage all parties to drive the vehicle; “I would love your opinion.”

8 } Allow some “quiet time” when the customer is driving so that they can 

      focus on their driving, the overall feel, size and road manners of the vehicle.

9 } Trial close or transition close 1 or 2 minutes prior to the end of the drive.  

      E.g.: “Carly, provided the payments fit your lifestyle, is this the vehicle you  

      would like to own?” or, “Mr. Lee, when we get back to the dealership, I will  

      provide you with some various payment options available on this vehicle.”

10 } Ensure that ALL customers are transitioned back to the showroom and the 

         sales consultant’s work station.  You can’t close an empty chair.  Provide  

        ALL customers with a payment-based proposal. 

As new vehicles continue to become more technologically advanced, consider making sales consultant-accompanied test drives mandatory at your dealership. Vastly improve your customer’s purchase experience, even in times when you don’t need to.

Chris Schulthies is president of Toronto-based Wye Management. Wye Management provides sales and management training (showroom and digital) for dealerships, dealer groups, OEMs and industry suppliers in Canada and the U.S.

cschulthies@wyemanagement.com

As vehicle inventories slowly return to a new normal over the course of this year, dealership competition will again intensify.  The focus over the past two years of pandemic has been the creation of e-lead/digital sales processes.  However, not as many customers shifted to an end-to-end digital experience as was anticipated at the early beginning of the pandemic.  The showroom experience is still in vogue and many dealerships are experiencing robust “walk-in” customer traffic as customers are excited to be out and about and experiencing human interaction – even with a dose of gratitude.  The showroom sales experience is far from dead, but its current look needs to be re-examined, if not turned upside down.

For the past 40 years the showroom sales process has looked something like this (or a close proximity):

TRADITIONAL and TIRED:

1. Meet & Greet
2. Counsel & Qualify
3. Vehicle Selection
4. Vehicle Presentation
5. Vehicle Demonstration Drive
6. Trade-In Appraisal
7. Dealership Tour
8. Close the Sale
9. F&I Office

Consider the following upending…

Move the Trade-In Appraisal to STEP #1 as part of the Meet & Greet.

Offer a trade-in appraisal minutes into your dealership’s sales process; “Matt, Laura, I will have your vehicle professionally appraised. It’s FREE and there’s no obligation. I’m sure that you want a firm value on your vehicle before you leave. We would also like the opportunity to buy your vehicle even if you don’t buy one of ours.”  Now, please don’t jump to conclusions and paint me as a naive school teacher – far from it. I am not advocating simply dedicating resources to a full appraisal and then handing the customer a valuation like a DQ Dilly Bar coupon.  No, I am suggesting that we begin the trade-in appraisal process as early as possible so the appraiser has the time to do a proper physical examination and road test as well as the time to utilize the technology tools provided by the dealership such as v-Auto, Trade Rev, etc.  The trade-in value can be dispensed to the customer later in the sale as part of a proposal, complete with multiple payment options.  Both customers and sales consultants alike are frustrated with sales processes where appraisals are completed 30 – 45 minutes AFTER a demonstration drive – enthusiasm and momentum are lost on all sides.

Also consider offering a Finance Pre-Approval Service as part of your STEP #2.  Since 92% of all transactions are payment-based, why not offer a service to address this early in the sale as opposed to at the end of the sale?  You offer it to customer on your website before they arrive at the dealership, so why not consider offering it once at the dealership early in their visit.  This would entail having the customer complete a mini or “fast track” credit application (either paper or tablet) when they first sit down with the sales consultant at their work station.  Finance Pre-Approval Services are welcomed and appreciated by so many customers; it is a chance for credit-challenged customers to discuss their situation and be handed over to a specialist.  Moreover, there are significant numbers of customers that have excellent credit that are very nervous about the entire credit-decisioning process and have many questions.  Most people today wouldn’t even consider shopping for a home unless they had a mortgage pre-approval in place.

Consider moving the Vehicle Demonstration Drive before the Vehicle Presentation.  Today’s new vehicles have become iPhones on wheels and customers are hungry for all of the new, cool tech, luxurious interiors and incredible ride quality and driving dynamics.  Don’t hold your customers back!  Following a beneficial Discovery session (and Finance Pre-Approval Service?), transition them into a sales consultant-accompanied Demonstration Drive and build the anticipation and excitement!  A modernized 8 – 10-minute Express Vehicle Presentation can be completed at a quiet, scenic driver change point during the Vehicle Demonstration Drive, or following the drive once back at the dealership.  A well practiced, choreographed Express Vehicle Presentation is the icing on the cake and will have sales consultants truly stand out from the crowd (most dealerships and sales consultants do NOT facilitate any kind of vehicle presentation).

Consider moving the Dealership Tour to being part of the Vehicle Delivery process.  Most sales consultants don’t want to do this anyway and pay lip service to actually doing it.  It slows the momentum of a sale.  There is certainly value in familiarizing customers with the facilities, amenities and services offered, but the timing during traditional sales processes is simply awkward and outdated.

Hence, an updated (express-style, condensed), upside down sales process may look a little bit like this:

1. Guest Welcome & Trade-In Appraisal
2. Discovery (Needs Assessment & Relationship)

2b. Finance Pre-Approval Service

• Vehicle Demonstration Drive
• Vehicle Presentation
• Payment Solutions

I have merely grazed the surface of an enormous piece of subject matter to whet the appetite and hopefully stimulate some critical thinking.  If you would like to discuss or debate this subject in more depth, I would love to connect with you.

Chris Schulthies is the president of Toronto-based Wye Management. Wye Management provides sales and management training (showroom and digital) for dealerships, dealer groups, OEMs and industry suppliers in Canada and the U.S.

cschulthies@wyemanagement.com

Millennials (born 1981 – 1996) and Generation Z (born 1997 – 2012) are not lazy, lethargic, entitled and directionless and the more the leaders of an organization think this way, or worse, publicly denounces these groups, the more they alienate their employees and turn staff (don’t be a grumpy old men). Let’s face it, every generation thinks that we are doomed based on the generation that follows us. My son Kurt (born 1996) recently quipped, “Dad, if I am the generation of the lazy and the entitled, then congratulate your generation for creating us.” 

However, both Millennials and Generation Z’s will have different priorities and motivators, and even these 2 generations have differences.

Millennials vs. Generation Z

What they have in common:

• A desire to find (or create) meaning
• A motivation to contribute to the world
• Being highly educated
• Cultural diversity
• A desire for their own personalized experience
• A desire to seek work/life balance and integration

Generation Z is also different from Millennials in many ways. Many things that Millennials foster as preferences have become expectations of Gen Z’ers, and they expect you to take them seriously. They define themselves differently, are intrigued by group trends, are passionate about issues that their parents may not understand and are willing to do research.

Generation Z differences include:

• More independent
• More entrepreneurial
• More communicative
• More competitive
• More motivated by security
• Driven by career/financial goals
• Less validation expectations

The following are examples of how successful dealerships/dealer groups have aligned their thinking with the Millennials and the Gen Z’ers they work with.

A domestic dealership an hour outside of Vancouver allows salespeople to work a 30-hour work week. With the blessing of the team, the dealership hired additional salespeople to cover their 7-day-a-week showroom hours.

One of the most successful Honda dealers in the U.S. hires college graduates only, pays them a $75,000 salary and the salespeople work a 4-day work week.

The salespeople have a clear set of sales-related tasks they must complete each day as part of their compensation. The sales team averages over 15 sold vehicles/salesperson per month.

A large, domestic dealership north of Toronto allows the sales staff to do their own shift scheduling. Some of the younger, single salespeople prefer to go to the gym in the morning and work later to the 8:00 p.m. closing time, while some of the older, married salespeople with families prefer to work morning and afternoons and have dinners with their families and quality time with their kids in the early evenings.

Another highly successful domestic dealership in the Niagara region ensures that each salesperson has a schedule that includes two days off in a row every week. Salespeople have the opportunity to go away for a “weekend” and recharge their batteries.

Yet another domestic dealership in southwestern Ontario allows its top performing salespeople to work from home as much as they please, e-mailing, texting, making phone calls, setting up appointments and coming into the dealership for appointments and deliveries only. They are not assigned to any shift schedule.

A dealership an hour north of Toronto encourages their entire staff to get involved in the community with non-profit organizations. Salespeople, service advisors and technicians work in soup kitchens, volunteer at food banks, mow lawns and shovel snow for seniors, drive elderly and disabled to appointments, etc. For every day of community service, the dealership matches it with a day of vacation.

A dealer group in Atlantic Canada provides salespeople with unlimited vacation from the day they start, even sabbaticals.

A dealership south of Chicago hosts “Friday Zen”. A local Massage Therapy school sets up over 20 tables on the second floor of the dealership and Massage Therapy students provide free massages to all staff throughout the day.

Millennials and Gen Z’ers are entrepreneurial and prefer to develop several revenue streams – they don’t like having all their eggs in one basket. Forward thinking dealerships encourage and support this. They do not bemoan the constant use of cell phones in the showroom – Most Gen Z’ers consider their cell phone as a natural extension of both their social and entrepreneurial life.  Progressive (and clever) dealerships teach salespeople how to use various video apps and how to create YouTube® and Tik Tok® channels that not only brand and promote their sales career, but actually generate revenue from social media platforms. Several Canadian salespeople are generating a six-figure income from selling cars as well as a second six-figure income from their social media followers. One of our current and most successful 1-day workshops teaches salespeople exactly how to do this.

Baby Boomers and Gen X’ers have traditionally put in long hours and 5 or even 6 day work weeks and relish their time away from the workplace and co-workers. Millennials and Gen Z’ers on the other hand, love to socialize with their coworkers outside of the workplace. Progressive dealerships encourage this with organized events for the sales and service teams such a ping-pong tournaments, pool tournaments, poker nights, online gaming tournaments, golfing, basketball, volleyball, wine tasting, paintball, axe-throwing, horseback riding, salmon fishing, kayaking, zip-lining, skydiving and track days.

Furthermore, Millennials and Gen Z ‘ers enjoy constant banter with their colleagues (salespeople, service advisors, technicians as well as their sales managers) via group chat both during and after hours. Sales Managers form strong bonds with their teams by participating and learning more about their people through this informal and often highly charged chirping and chatter.

Finally, and perhaps most importantly, Millennials and Gen Z’ers do not respond to autocratic and dictatorial styles of leadership. Yelling and shaming at sales meetings, humiliation, “My way or the highway” statements and attitudes and high pressure work environments are considered repulsive. Millennials and Gen Z’ers want leaders that respect their input and opinions, and “truly” listen to them and not patronize them. They respond to team environments, where the sales team both wins together or loses together. When the team wins (achieving sales/profit/CSI targets, etc.), the team shares both the spoils and the accolades and celebrates together. When the team loses, the leadership does not point fingers, but instead takes ownership and responsibility. The entire team (including the leaders) support, nurture and coach each other.

The pandemic seemingly has been the catalyst for a transformational shift of the entire workforce, including retail automotive. Dealer Principals and managers that live in the past and constantly talk of “what we used to do” and drone on about the habits, lack of work ethic and cell phones of the “younger generation” will be left behind with empty showrooms. Progressive, enthusiastic leaders will not only adapt to the new generation of young entrepreneurs, but will look for ways to inspire and delight them in the workplace.

Chris Schulthies is the president of Toronto-based Wye Management. Wye Management provides sales and management training (showroom and digital) for dealerships, dealer groups, OEMs and industry suppliers in Canada and the U.S.

cschulthies@wyemanagement.com

As dealership leaders we train and coach our sales consultants to ask a myriad of qualifying questions in order that they gain a better understanding of a customer’s needs and wants in a newer vehicle.

However, there are two questions that the majority of sales managers continually direct sales consultants to ask that create awkward confrontations and result in depleted gross profit.

Sales consultants are directed by sales managers to ask customers; “How much do you want for your car?” In fact, many sales managers insist that this question be posed before appraising a customer’s vehicle and the creation of a proposal. This question dates back to the 1970’s and may simply be a habit passed down from generation to generation of Sales Managers. However, if you really think about this question, what value does this question really have – or what harm?

When it comes to the value of their own vehicle, a customer has three numbers in mind. The first is the WANT number. This is the value that the customer truly believes their vehicle is worth based on their own independent research on retail websites such as Autotrader, Car Gurus, Kijiji, etc.

The second is the WISH number. This value is much higher than the WANT number. The customer’s attitude is, “Who knows, maybe my car is worth a lot more in the market than what I think. My car seems to be in better shape than the ones I’ve seen online. Maybe there is a big demand for my car. Maybe the dealership will offer me crazy money because I’ve heard that there are shortages of used cars. If I shoot for the stars with my number, maybe I’ll land on the moon.”

The third number is the WOULD number. The WOULD number is lower than both the WANT and WISH numbers. This is the number that (in the customer’s mind) they would take if they were highly motivated and excited to buy a newer vehicle – or had been provided a credible explanation from the sales consultant as to how the dealership appraises their trade-in and how they arrive at the final trade-in value.

The following is an example of a customer’s WISH, WANT WOULD:

WISH Number: $18,000

“What I wish I could get for my car – who knows.”            

WANT Number: $16,500

“What I really want for my car.”                                               

WOULD Number: $16,000

“What I would actually take for my car if I really want yours.”

If a sales consultant is directed to ask the customer, “How much do you want for your car”, which number is the customer going to serve up; the WISH, WANT or WOULD? The WISH number, of course. It gets worse. When the sales manager asks the sales consultant for the customer’s number, the sales manager is frustrated with the customer’s response; “Where did your customer come up with that number? That’s a retail number! Did you tell the customer that we pay wholesale, not retail? Go ask your customer where they came up with that number.” When the sales consultant now questions (or even confronts) the customer with respect to the source of their number, the customer defends their number and digs in, entrenching. Now they feel that they must vehemently defend their number and their pride – and the customer is befuddled as to why the sales consultant and sales manager seem somewhat annoyed (“If you don’t like my number, why did you ask?”). This exasperating and backwards questioning actually breaks the first rule of negotiation; He/she who puts the first number on paper wins. If a customer puts the first number on paper (because they have been asked to), the dealership is now attempting to negotiate downward from the customer’s WISH number of $18,000. This makes for tough, drawn-out and often confrontational negotiation. It significantly reduces the gross profit as the dealership struggles to appease and come close to the customer’s WISH number.

Also consider the fact that dealerships employ trained and highly experienced appraisers that are expert in establishing the value of a vehicle. Dealerships also invest tens of thousand of dollars annually on technology tools such as vAuto and CARFAX Vehicle Valuation Reports to assist appraisers in determining credible, accurate, market-researched values. This begs the question; why are dealerships (appraisal experts) asking school teachers, accountants, engineers, truck drivers, factory workers, fitness instructors, etc. what the value of their vehicle is? Customers often wonder the same; “You tell me what my vehicle is worth.”  

The second question that sales consultants are directed by sales managers to ask customers is; “What would you like to offer for our car?” – most commonly asked when selling USED vehicles. Again, this puts the customer in an extremely awkward and uncomfortable position. Customers do not have intimate knowledge of NEW and USED vehicle profit margins, and of course, most people perceive the margins to be much higher than the reality. Hence, just like their trade-in, the customer has a WISH, WANT and a WOULD number with respect to how much they want to pay for the dealership’s vehicle. For example, if the price of a USED vehicle is $29,997, the customer’s thought process might be as follows;

SELLING PRICE: $29,997

WISH Number:

“I wish I could pay $28,000 for the dealership’s car – who knows, maybe they’ll take it!”      

WANT Number:

“I really want to pay $29,000 for the dealership’s car.”                                        

WOULD Number:

“I would actually pay $29,700,00 for the dealership’s car if I really want it.”

If a sales consultant is directed to ask the customer, “What would you like to offer for our car?”, which number is the customer going to serve up; the WISH, WANT or the WOULD?

Despite what many sales managers would like to admit, the simple practice of asking, “How much do you want for your car” and “What would you like to offer for our car?” is the norm rather than the exception – yes, still today. Eliminate this practice altogether – stop asking. If you don’t want BAD answers, then stop asking BAD questions.

Instead, offer to appraise a customer’s trade-in as early as possible within your SHOWROOM and DIGITAL sales processes – how about step #1 as part of the customer welcome; “Mr. Lee, I will arrange to have your vehicle professionally appraised. It’s FREE and there’s no obligation. If you would consider it, we would also like the opportunity to buy your car even if you don’t buy one of ours.” Come time to present a proposal (ideally following a vehicle presentation and demonstrations drive), simply present the vehicle’s SELLING PRICE, MANUFACTURER’S INCENTIVES (where applicable), TRADE-IN VALUE and 3 – 6 strategic payment options.

Instead of asking a customer how much they want for their car and to make an offer on ours, let’s MAKE THEM AN OFFER! Confidently, present a proposal (let’s get our numbers on paper first), guide the customer, reduce stress on both sides of the negotiation and retain gross profit.

Chris Schulthies is the president of Toronto-based Wye Management. Wye Management provides sales and management training (showroom and digital) for dealerships, dealer groups, OEMs and industry suppliers in Canada and the U.S.

cschulthies@wyemanagement.com

“Get on the phones, make appointments!” is one of the most single, dreaded statements to the panicked ears of dealership salespeople.  Whenever walk-in traffic dwindles or when dealerships are behind their monthly sales target, Sales Managers print customer lists from the dealership’s database and distribute them with scowls to terrified salespeople.  Salespeople are instructed to call and offer new vehicle upgrades for the purpose of acquiring fresh trade-ins and to sell new vehicles.  Salespeople scatter in every direction like rats on a sinking ship to avoid the prospect of calling the dealership’s current customers in search of new business; “Oh, I have a delivery”, “Oh, I customer on the way”, “Oh, I have to book my body wax”, “Oh, I have to call my sick auntie”, “Oh, I have to run home and feed my ferret”, “Oh, I have to watch Tiger King”, “Oh, I have to plan my son’s Bar Mitzvah”, “Oh, I have diarrhea”, etc.  This scenario plays out on a monthly basis at dealerships across the country.

From inception, Canadian companies like Absolute Results, OTC and others realized that most dealerships were uncomfortable and even unwilling to contact their own previous customers in order to have them buy newer vehicles.  Hence, these companies create innovative marketing campaigns with incentives (both digital and print) and contact the dealership’s database of customers by mail, e-mail, text, phone and any and all technologies.  In effect, these thriving organizations are now doing the job of their client dealerships and their salespeople. 

This begs the question; Why is there so much fear and resistance to making these outbound calls?  The reasons are quite simple and fixable.  

The PROBLEM:

The distribution of customer lists and the barking of Sales Managers creates the perception that calling customers is a class detention or a trip to the penalty box.  Calling customers is often presented as a punishment for sagging sales or the angry reaction of a Sales Manager under pressure.

The FIX:

During the hiring and onboarding process of new salespeople, carefully review your dealership’s showroom and digital sales process and discuss with potential candidates that making outbound phone calls is a positive and productive part of your dealership’s culture – and an expectation.  Create a schedule whereby outbound calls are made as a group (Phone Ninja Blitzes) 2 or 3 times per week (or more) at two scheduled intervals per day to accommodate sales team shifts.  Create competition by writing down appointments on a large Appointment Board.  Have periodic spiffs for MOST APPOINTMENTS or MOST APPOINTMENTS that SHOW, etc.  Show as much recognition and enthusiasm for APPOINTMENTS as you do for vehicles sales.

The PROBLEM:

Many salespeople have not been told WHY they are calling current customers; Sales Managers have not “sold” this method of seeking new customers to their teams by positioning outbound phone calls as a high-percentage opportunity to sell more vehicles.  

The FIX:

These calls are most often made to our current customers; people that have purchased vehicles from us in the past with most still doing business with us in our Service and Parts departments.  Hence, these are not COLD calls; these are WARM calls.  At any given time, 20% or more of a dealership’s customer database is willing to purchase a newer vehicle NOW if proactively contacted by the dealership.  No doubt, there will be many calls that go unanswered due to busy customer lifestyles or those that are simply unwilling to answer their cell.  In these situations, a text accompanied by a 1-minute video (with the current dealer and manufacturer offers) can also be effective.  However, dealerships that regularly make outbound phones calls (as a collective team), are often met with friendly, receptive customers.  Rarely are people upset by the solicitation if done in a thoughtful and professional manner.  And do Phone Ninja Blitzes work?  You bet they do!  In a recent in-dealership training assignment just weeks ago on the west coast, one of our trainers trained and coordinated Phone Ninja Blitzes.  Just 3 hours of well-thought-out calls yielded 28 appointments at a VW dealership, 1.5 hours of calls yielded 16 appointments at a Hyundai dealership and 1.5 hours of calls yielded 48 appointments at a Chrysler dealership.  These Phone Ninja Blitzes set in motion an energized sales team and a highly productive week of new and pre-owned vehicle sales.

The PROBLEM:

Regardless of industry experience, many salespeople simply don’t know HOW to make effective outbound phone calls (and their Sales Managers assume they do).  

The FIX:

Train salespeople HOW to make effective outbound phone calls.  Instead of passing out a one-size-fits-all call script, have Sales Managers sit down with each salesperson and create several call scripts (together) that fit each salesperson’s selling style, personality and comfort level.  Role play the calls.  Then, sitting at the salesperson’s work station, take turns making outbound phone calls TOGETHER.  If your Sales Managers do not have the knowledge, expertise or experience to train this critically important skill, outsource and bring sales trainers right to your dealership showroom to work with your entire sales and leadership team.

Consider the following are talk-points when making outbound phone calls:

“We want YOUR vehicle.  The current used vehicle market is like Canada’s housing market – it’s booming and (as a dealership) we are running very low on used vehicle inventory.  The best place for us to find high quality used vehicles is with our own customers.  Would you consider allowing us to buy your vehicle, and as compensation, we could offer you a brand-new vehicle at an extremely attractive payment?  We would begin the process with a NO CHARGE, NO OBLIGATION Certified Appraisal and show you the difference in monthly payments to UPGRADE your vehicle. It’s easy and relaxed.  If upgrading your vehicle doesn’t make sense to you based on the numbers, then you continue to drive a great vehicle.  If the numbers do make sense, you get beautiful new styling, more features, ever-increasing safety and worry-free driving with a new factory warranty and roadside assistance”.  Is this something that you would consider?”

“Since inventory levels of our new vehicles are at record LOWS, we are contacting all of our customers to offer customized factory-orders.  The arrival of the factory-order may just be the perfect time for you to exchange your current vehicle.”

“Many of us that have been lucky enough to work through the pandemic have actually saved money.  We did not take luxury vacations, spend money of concerts, sporting events, theatres and weddings.  We have not been spending as much money at restaurants and bars.  We have not been buying clothes, spending money on dry cleaning, business lunches and public transit.  As a result, many of our customer are deciding to reward themselves by upgrading their present vehicle.  It’s a little retail therapy to reward yourself and celebrate the end the pandemic.”

“According to CAA, the average Canadian spends an average of $1,400 in vehicle maintenance and repairs after the factory warranty expires.  This would theoretically increase your current monthly payment by approximately $116 per month.  Would you consider allowing us to take back your present vehicle; we could offer you a brand-new 2021/2022 at an extremely attractive payment with new styling, improved safety technology, more state-of-the-art convenience features and a fresh, factory warranty reset back to day one?”   

The PROBLEM:

Most salespeople resent being told to perform tasks that their Sales Managers are unwilling to do WITH THEM. This is the single biggest reason why salespeople resist making outbound phone calls.

The FIX:

Sales Managers MUST make calls with their salespeople if they wish this to be a positive and productive activity.  Making outbound phone calls can be uncomfortable and awkward for salespeople of all experience levels – as well as Sales Managers.  Most salespeople don’t expect perfection in their Sales Managers or have the notion that they are expert at all facets of selling.  However, when Sales Managers are willing to make outbounds phone calls with their sales team, this is an act of leadership AND learning.  At a recent in-dealership training assignment on the west coast, our sales trainer organized a 1.5-hour Phone Ninja Blitz at 10:00 a.m.  The 11 salespeople comprising the morning shift, 2 Sales Managers, the General Sales Manager, the General Manager and the sales trainer all attacked the phones with an appointment target combined with energy and enthusiasm.  The salespeople watched their leadership team work the phones with the same intensity and focus as they did.  The sales team was energized and proud of their managers.  More importantly the appointment results and subsequent vehicles sold were astounding. Leadership is not a title.  It is action and example.  Hence, don’t tell your salespeople to get on the phones; instead get on the phones WITH THEM!

Chris Schulthies is a National Sales Trainer and Consultant with Toronto-based Wye Management.  Wye Management provides sales and management training (showroom and digital) for dealerships, dealer groups, OEMs and industry suppliers in Canada and the U.S.

cschulthies@wyemanagement.com

In many dealerships, when a salesperson realizes that they are going to have to factory-order a customer’s request for a new vehicle, the salesperson often treats this scenario with either defeat, a lack of interest and enthusiasm or a glib response; “You know that you’re going to have to factory-order that don’t you?”. Salespeople often feel that the chances of closing this sale are slimmer and many are deflated at the thought of waiting 3 – 6 months for a commission cheque.  Other salespeople are legitimately concerned about selling factory-orders and then having to later inform their customers that their vehicle is going to be delayed by weeks or even months.

Although factory-orders have always been an “as necessary” part of our business, they have now become a mainstream method of purchasing and selling new vehicles as a result of current inventory shortages.  In the 1950’s, 60’s and 70’s, dealerships hosted new vehicle galas in their showrooms when the new model-year vehicles arrived.  The town’s “establishment” would attend these Champagne, black-tie events, and be the first (privileged) to view the all new 1965 Buicks.  That same evening or in the days following, the gala guests would factory-order their new Buicks.  The “chic” factory-ordered, while the common-man bought a new vehicle from stock.  Why don’t we (once again) make factory-orders “chic”, trendy, cool, dope, off-the-hook or, at the very least, an experience?

The following are some elements to consider as part of your Factory-Order Sales Process.

WELCOME:

This step of your Showroom Sales Process would remain unchanged as the salesperson would not yet have identified the need to factory-order a new vehicle.

TRADE-IN APPRAISAL:

Trade-In Appraisals should always be completed at the beginning of your Showroom Sales Process (call me and I will offer numerous reasons why).

However, once a salesperson identifies the need to factory-order, this becomes even more imperative.  By facilitating the trade-in appraisal early, the dealership is “buying time” with the customer; giving the salesperson needed time and opportunity to build rapport and a relationship.  Furthermore, a FREE, NO OBLIGATION Certified Trade-In Appraisal begins to create a sense of customer obligation to the dealership.

DISCOVERY:

Establishing the customer’s needs and wants becomes even more critical with a factory-order.  This should be done sitting down with a customer.  Consider establishing several neutral seating areas in your dealership to allow salespeople to make this step somewhat more casual and less confining (think Starbucks). Also consider introducing (or re-introducing) a Guest Welcome sheet (paper or tablet) to ensure that salespeople are thorough in their needs analysis.  Special Note: The more detailed and complete a Guest Welcome Sheet, the higher the gross profit/transaction (proof).  If you would like a number of Guest Welcome sheet templates, contact me.

WHY ORDER FROM US:

Because we have no vehicle to show and demonstrate, identify and create a list of 6 – 10 reasons why a customer would choose your dealership versus your direct (same franchise) competitor (e.g.: Service Department pick-up and drop-off, loaner vehicles, car wash, Service Department Loyalty program, etc.).  Have this list laminated (or tablet) and review it with every customer.

SALES MANAGER EARLY INTRODUCTION:

Sales Managers should always introduce themselves within the first 10 minutes of a customer’s arrival at your dealership.  Today’s Sales Managers are smarter and more personable than ever.  Having the boss meet customers is even that much more important with a factory-order.  The dealership needs to create such a positive and overwhelming “red carpet” impression on the customer that they would be wanting and willing to trust the dealership in placing an order.  We need to show extreme focus, interest and love.

FINANCE/LEASE PRE-APPROVAL SERVICE:

Your dealership currently allows your customers to begin the credit approval process online or at the end of the sale with your Financial Services Manager. Why not also offer a Finance/Lease Pre-Approval Service early in the sale at the conclusion of the salesperson’s Discovery session.  This further obligates the customer in a positive manner.  More importantly, it is not just credit-challenged customers that are concerned about their chances of getting approved for a new vehicle loan.  A growing number of “established”, educated professionals, home owners with good credit are increasingly more anxious about the credit-decisioning process.  Furthermore, when we are able to share the “good news” with a customer that they are APPROVED even before they buy their vehicle, our chances of closing the sale increase substantially.

VIRTUAL VEHICLE PRESENTATION

At a recent training session, we had salespeople presenting new vehicles to customers utilizing the BUILD and PRICE tool on their manufacturer’s website.

They were able to construct and facilitate an entire 6-Point Walk-Around Vehicle Presentation on a computer monitor using their cursor and the 360° viewing tool.  The result was innovative, fun and effective. Just because we don’t have a vehicle “on-ground” are we going to let that stop us from delivering a creative and informative vehicle presentation?

DEALERSHIP TOUR

If there is no vehicle to present and demonstrate to a customer, build value in the dealership facility.  Salespeople should take their customer on a choreographed dealership tour.  This would include a walk-through and pointing out services and conveniences such as the customer lounge, coffee bar and Wifi, Service Department Drive-Thru, Accessories Department, etc.  Service Managers and Service Advisors should also be apprised and introduced to these potential customers.  Make your dealership “homey”, inviting and exciting.

PAYMENT OPTIONS

Payment Options should be provided to ALL customers, whether they are ready to buy a new vehicle “today” or not.  There are thousands of scenarios where customers have emphatically proclaimed that they are “not ready to buy”, and then they do.  Dealerships that continue to delay, withhold or not provide detailed pricing, trade-in values and multiple payment options lose customers. As customers visit fewer and fewer dealerships, the notion of giving customers a “hunting license” is becoming an ideology and excuse of the past.  Presenting multiple payment options becomes a more natural way to close the sale; instead of old school questions such as, “What would you like to offer?”, the question becomes, “Which payment option would work best for your lifestyle?”.  Closing the sale by providing payment options also shifts the focus away from price (since we are currently not discounting) and squarely on monthly/bi-weekly payments.

COMMUNICATION

If you want salespeople to be more enthusiastic about factory-orders, than hand over the responsibility of customer communication updates to either a Sales Manager or a Sales Administrator.  Salespeople are extremely anxious when they have to call their factory-order customers to deliver bad news of vehicle delivery delays from the manufacturer.  There have been numerous situations all across Canada where salespeople have not returned customer phone calls/texts/e-mails inquiring about the delivery status of their factory-order.  The salespeople are simply fearful of customer frustration, anger or disappointment and will often avoid the confrontations (unknown to the Sales Manager).  Frustrated customers have walked away from deposits and purchased elsewhere, only to start the process all over.

We have all faced and overcome so many challenges over the past year and a half.  Instead of listening to what are becoming tired, repetitive comments and complaints about inventory, let’s use this use factory-orders as another new and positive tool to adapt and succeed.  Build your Factory-Order Sales Process and make factory-orders the new “cool”.

Chris Schulthies is the president of Toronto-based Wye Management.  Wye Management provides sales and management training (showroom and digital) for dealerships, dealer groups, OEMs and industry suppliers in Canada and the U.S.

cschulthies@wyemanagement.com

Cell: 416.908.6346