by Joe Verde
It takes more than a smile and product knowledge to succeed in sales and too many of you are missing those extra sales simply because your salespeople haven’t been taught the other things they need to know about “how to sell cars in today’s market”.
At a quick glance, a lot of your salespeople seem to be doing everything that it takes to sell more cars…
They’re happy, they love their job, they love the dealership, they love their customers and they may even put in double shifts every day. The problem is, they still only end up with a below average number of units for the month (10 is average).
Here are a dozen things they may be very good at, and still not produce the unit sales and gross that you were hoping for. Circle the ones that describe (yourself) and each salesperson on your staff…
1. I love cars and the business
2. I have tons of product knowledge
3. I have a great attitude
4. I have a professional appearance
5. I’m outgoing, personable and friendly
6. I love talking on the telephone
7. I know my inventory
8. I am a goal setter
9. I am extremely organized
10. I come to work to work
11. I care about my customers
12. I am a team player
Again, I’ll bet you checked almost everything on the list for some of your people and they sound perfect. So why aren’t they selling more vehicles each month? It’s easy, because nothing on the list above has anything to do with their actual selling skills and the problem is that a bunch of nice people who love cars, love their customers and love their job can still break the bank if they don’t know how to “sell”.
They still have to learn how to sell!
It’s the ‘haven’t learned how to sell’ part that keeps most people stuck in the average rut in sales (in any industry). All the attributes and abilities listed above are certainly important in the selling process and everything on the list is critical if anyone is going to become a high achiever in sales. But … and this is a BIG BUT – here are a dozen other things you have to learn as a manager and then teach each of your salespeople if you want them to reach any serious levels of success for themselves and for your dealership.
Rate yourself and each salesperson in your dealership from 1 – 10 in each area below. ’10’ would be perfect so be careful.
1. Control The Sales Process
Everybody is a buyer, but very few will buy on their own without help from a professional salesperson.
Let me clarify that ‘control’ doesn’t mean follow customers around the lot answering questions, that’s just called ‘following people around the lot answering questions’ and that has nothing to do with selling. Nor is ‘control’ a negative process in any way. Controlling the selling process means asking questions instead of just answering them, it means keeping the sale on track and “control” means leading the customer through the ‘Basic’ process of purchasing a vehicle (see #2).
2. Follow The Basics With Every Prospect
a. Your dealership spends the money to put prospects on the lot.
b. You hired your salespeople to “sell” them once they’re there.
- The ‘Basics’ are a series of steps specifically designed to lead a prospect through the process of purchasing a vehicle. If your salespeople don’t follow the steps with every prospect, you lose 7 out of every 8 sales that you could have made (Yes, 7 out of 8). On the other hand, if your salespeople know how to, and if they actually follow each step of the ‘Basics’…you’ll end up with a sale 50% of the time, even with those toughest to close, walk-in prospects.
- The problem is they don’t follow the steps. Instead of taking these steps with every customer, they pre-qualify every one of your prospects, they take shortcuts almost everywhere and they skip the most important steps in this process altogether.
- You lose more sales from your salespeople not following the “Basics” than from any other reason. (There’s a catch…see 3-6.)
3. Ask The Right Questions
- Most salespeople just talk and talk and figure if they tell the prospect enough, the prospect will have enough information, they’ll get excited and want to buy the product.
- Two problems with that thought; “you don’t tell your way to the sale – you ask your way to the sale” and “80% of the selling is done on just 20% of the features” (their hot buttons). Every professional in sales knows that questions are the secret to selling. You ask questions to find their wants and needs, you show them features they care most about, then you ask questions to verify the benefits they wanted and finally, you ask questions to close the sale and to handle their buying objections.
- If you want them to succeed, you have to teach your salespeople how to ask the right questions at the right time, otherwise you end up with just a bunch of 8 car guys.
- Question: If your salespeople are just a bunch of 8 car guys, does that mean your management is just a bunch of 8 car managers?
4. Effectively Bypass Price
- You can’t talk price and build value at the same time – and of course, there is a time to talk price. Here’s an easy logic question…”When is the best time to talk price, before your prospect is excited about owning the vehicle or after they’re excited and ready to take it home?”
- In order: build value, get them excited and then talk price. Talk price first, and you never get to value or into the excitement of owning and using the product. And please save the “we have to talk price to find their budget before we put them on a car”…that’s the 8 car guy logic, not what the pros do. In fact, I had a salesperson increase his income from $110,000 to $192,000 the next year after our training and he said his biggest change was “not talking price and spending more time on the basics before he asked for the order”. And a guy just called me to let me know that he went from just under $200,000 in 2001 to just over $300,000 in 2002. Same thing, less price, more value.
- If you understood this one concept, and then if you personally learned how and then taught your salespeople to handle price effectively, three things would happen:
a. Your unit sales will go up more than 25%.
b. Your gross would go up more than 50%.
c. Your CSI will follow gross.
5. Close The Sale Until It’s Closed
- People are nervous about spending 20 or 30 grand, so they say “no” a lot, especially to a salesperson they’ve only known a few minutes who hasn’t followed the steps to the sale and only talks ‘price’. Selling is knowing how and when to ask for the order, hearing “no” (an objection) almost every time and continuing to sell until you get the “yes”.
- It’s very important to understand that 80% of all sales are closed after the 5th attempt.
- Unfortunately, right now 75% of the time, the average salesperson only asks for the order one time before they whip out their business card and say “before you buy anything anywhere else, make sure you see us because we’ll beat any deal in town”.
- You and your salespeople need to learn to close the sale because “if we can work it out the way you want to buy it…etc.?” and “do y’all wanna go inside and see what we can do?” are the two worst closing questions you could possibly ask. Learn to close and unit sales, gross and CSI go up immediately.
6. Handle All Of Their Objections
- These are the things customers bring up to keep from saying “yes”. Some are real objections, most aren’t. Most objections are created by the salesperson because they skip the steps of selling.
- For the record, there are only 7 different objections in this business that stand between your salespeople and a sale.
- They’ve had these same objections for 50 years and will have the same ones 50 years from now. Yet most dealers and managers justify why they can’t send their managers and salespeople to class to learn the 5 easy techniques to successfully handle every one of these objections so they run bigger and even more ‘price’ ads to hopefully put more people on the lot to make up for lack of skills. Sure price is one of the objections, in fact, price is actually one of the easiest to handle – without discounting the vehicle.
- Note: Until they learn how to stay off price, learn to follow the basics, learn to close the sale and handle objections, you’ll miss 4 times as many sales as you make, your gross will be low and your CSI will be in the pits. In fact, we just got an email from a Saturn store with 5 salespeople and now 3 of the 5 are averaging 29 units per month a piece, and they aren’t selling price. And another Saturn store told me that by July of last year the salespeople they sent to class had already passed their previous year’s sales totals!
- And we had a Chevy store in LA (lots of price competition) with an average gross of around $1,900 per unit. After their managers and salespeople came to class and improved in those four areas, their sales have more than doubled, their gross the last time we talked was $4,800 per unit and they’ve moved up in CSI and fluctuate between #1 and #5 in the state. You really do need to get a grip on this selling stuff because professional selling has never been about the price – it’s always been about value!
7. Follow Up Working Prospects
a. 78% of the people who walk on your lot are going to buy.
b. 90% of them will make their purchase within a week.
c. 80% will leave your dealership without buying.
d. 33% will come back in with good follow up.
e. 67% of them will purchase on their 2nd visit.
- You’ve already spent hundreds of dollars per person to get these prospects on the lot and the only question is; after 80% leave without buying, will your salespeople invest the 5 minutes or less that it will take to follow up to get that person back on the lot so you’ll have a 67% chance to close the sale?
- Another fact in case you weren’t sure with that last question; 90% of those HOT PROSPECTS will not be contacted again. And instead of sending your managers and salespeople to class so we can teach them how to sell and how to follow up, you’ll spend twice as much to run more big price ads or schedule another tent sale to put more HOT PROSPECTS on the lot that they can’t sell and that they won’t follow up with later.
8. Follow Up Previous Customers
- 95% of the people you’ve sold in the past are going to buy again, the only question is ‘from which dealership?’
- Compared to walk-in prospects, with repeat customers closing ratios are 5 times higher, advertising costs are 5 times lower, gross is 40% higher and CSI will skyrocket!
- When a repeat customer comes back in, your closing ratio jumps from a very low 8-12% with walk-in traffic to 60-70%. Not only that, the real good news is that your gross profit will be 40% higher, your advertising costs will be under $50 and your CSI scores will reach all time highs. Here again, the only question is whether your managers will learn how and then teach and then require your salespeople to call them back.
- Fact: 90% of those HOT PROSPECTS will not be contacted again because your salespeople and managers haven’t been to class yet to learn how to build your customer base. That’s why you have to spend so much money on advertising and why a ‘good month’ depends so heavily on your ‘volume’ of walk-in traffic.
9. Prospect (Personally)
- 30% of the people have a family member who will be trading vehicles within the next 90 days.
- Your salespeople come to work and hope your dealership prospects (Radio / TV / Newspaper / Internet) so you can supply them with a ton of people they can prequalify, skip the steps of the ‘Basics’ with, talk price to and try to close with 0% financing.
- You hired your salespeople to prospect and you’re sitting on a gold mine right in your own customer base and service department – if – someone just knew how to prospect effectively. When your salespeople prospect and bring that customer in, you get the same benefits you do in #8 above; low cost, high gross, easy to close, with great CSI.
- But – do your salespeople prospect for those easy buyers? Nah … since you’ve never sent them and your managers to class and since you don’t require them to prospect (can’t require it if they don’t know how), your salespeople just complain and some even quit, because you don’t bring in more floor traffic.
10. Handle Telephones – Effectively
- The telephone is the single most important selling tool your managers and salespeople have to learn how to use. Why? Because 90% of your total selling opportunities require the use of the telephone. If you get 500 people on the lot in a month, 100 buy and the other 400 won’t be back until and unless your salespeople and managers learn how to use the phone effectively and can make that 5 minute phone call (see #7) to get them back on the lot. And if you sell 100 units per month, you also have about 150 incoming sales calls which rely 100% on your salespeople and manager’s phone skills to get them on the lot.
- Without good skills salespeople can’t build your best customers – your repeat business. They won’t have many of those easy to close “be-backs”, they won’t be doing much prospecting and when an incoming call comes in, they’ll miss that sale, too.
- Just a note on those incoming sales calls; statistically, 90% will be buying within a week and you’ll end up getting more of those prospects on the lot if you don’t let anyone answer the phone, including managers. Yes, I’m serious, just let it ring and more people will come in than if you let an untrained, unmanaged salesperson or manager pick up the call because with their lack of skills, they’ll run them off faster than you can make it ring.
- The first phone room we installed was in a dealership that was selling 180 units per month. 90 days later they were up to 280 units and had already more than doubled their net profit. We taught them two things, “how to use the telephone effectively” and the other 11 things on this list. Tip: Don’t buy a phone room … just learn to use the phone!
11. Negotiate Successfully
- 90% of negotiation is not about price – yet that’s all that 90% of salespeople and managers focus on. Negotiation does not mean dropping price and it doesn’t mean splitting things and in real life, even though in the end 90% of you negotiate price, payments, etc. – negotiation actually has very little to do with price.
- Negotiation is part of the entire process. Making a sale is kind of like a chess game because everything you say and do is to make your next move more effective and the goal is to start at the curb and end up in Finance. And there’s a catch – at the end of this process, your customers have to feel good about the process and they have to want to be in Finance or your salesperson didn’t do their job. Ben Franklin said this has to be a Win / Win situation. It cannot end as a Win for the dealership / Lose for the customer or a Lose for the dealership / Win for the customer. Forget price, it doesn’t matter – just learn how to sell professionally!
12. Track Everything You Do
- You can’t grow, if you don’t know! In all sports, the coach knows every statistic on each player. How far they hit the ball, how many yards they run on each play, how high they can jump, how fast they can run, how many putts per round. No matter what the sport, every coach knows everything about each of their players. They know they need this information or they can’t help their players improve. And if the players don’t improve, the team can’t win the game.
- Business is just like sports, but most Dealers and Managers don’t understand tracking. They track everything in Service but almost nothing in ‘Sales’. In Service, the system the tracking – in sales, since the information has to come from the salespeople, most see it as too much trouble, or they don’t see the value and in real life, most don’t think it matters. Read this carefully because it’s critical to your growth…
- You may get lucky and grow some temporarily without tracking, but you can’t continue to grow unless your luck holds out.
- And I’ve found that the only thing wrong with luck, is that it’s never there when you need it the most.
- So what do you think – did you find a few places you’re missing sales and are you starting to understand why almost all of your salespeople are just average or below?
- And how about that rating you were going to do on yourself and your salespeople? There are a dozen things on this list, and that means each person could score as high as 120 on the ratings. Better yet, the ratings will spell out the exact training each person on your team needs if you’re serious about continued growth.
- And if you’re serious about improving, you’ll rate yourself in each area, too, and then you’ll make a commitment to improve yourself first. Why do you have to learn first? Well, take closing for example – they aren’t going to close many more sales until they are taught how to close sales. And sure we can do that in class. But, and this is another BIG BUT, until your management team learns everything you expect them to know and until your management team learns how to continue their training each day to maintain the skills we teach them in class, not too much will change for your average salesperson. Your motivated salespeople will learn and use what we cover and the rest need your help in the dealership every day to stay focused and to stay on track. In fact, nothing on this list is going to happen by itself and that’s why you also need to attend our training on Leadership.
- Leadership doesn’t mean waiting, hoping or blaming them for your dealership’s lack of success in sales or in any one of these areas. Just the opposite is true – good leaders are out front leading, guiding, supporting, training and managing the process and their salespeople every single day – and that’s something we can teach you to do well. Poor leaders on the other hand are out back somewhere or sitting behind a desk whining about how hard it is to find good people, or complaining about how hard it is to get them to come to work to work, or how hard it is to get them to do the right thing on those phone calls you get all day.
- Get a grip … you’re in charge and it’s time you started acting like the leader you’ve been hired to be. If you’re a Dealer, it’s time for you, your GM and GSM to get to our 2-Day Management / Leadership workshop so we can show you how to double or triple your net profit, almost overnight, like we do for anyone who is serious enough about growth to make positive changes in their organization.
- Don’t keep putting off training your sales force and putting off the success you deserve. Everything on this list is actually easy to learn and to apply back in your dealership. Just give us a call 1-800-445-6217 and we’ll get you signed up for our next workshop.
©2004 by The Joe Verde Group. All rights reserved. Reprinted here with permission.
Joe Verde has been in the car business since 1973 as a salesperson and manager, and since 1985 he has become the leader in sales and management training for our industry. His company, The Joe Verde Group, advises key decision makers in top dealerships internationally on how to achieve all of their sales and management goals. Joe has spoken at the ’91, ’92, ’93, ’94, ’96, ’97, ’98, ’99, 2000 and 2001 annual NADA conventions and has been invited back again in 2002. Joe is also in constant demand to speak around the world to manufacturers groups, dealer 20-groups, state and local associations and other auto industry groups.
You can contact Joe at:
The Joe Verde Group
P.O. Box 267 San Juan Capistrano, CA 92693-0267
Phone: 1 (888) 256-3669
Fax: 1 (949) 489-3881