Category Archives: Negotiating

The Rental Car Close

This a closing technique I heard for the first time about a year ago in one of my workshops. The guy who shared it with us swears he’s been using it for years, but this was the first time I had ever heard it. Many of you have asked me to publish it here, but you know I like to get as much feedback as I can from you guys before I do. I’ve only been teaching it for about eight months or so now, but so far, it’s been getting killer feedback.

This is designed to be used for the objection "I guess it’s not meant to be because the payments are still too high." This is an emotionally charged stall tactic that comes after the commitment to buy today has been acquired. Remember, the vast majority of the objections we get after the commitment are nothing more than stalls or time outs. They don’t mean "No!", they just mean "Not yet." Most customers, if we’ve done our job right so far, want to go ahead with the decision to own but just need to feel a little more comfortable about doing so.

For this example, let’s say we’ve already exhausted all the adjustments available to us (initial investment, term, leasing, etc.) and we’re at $360 per month but they want to be at $300. Our customer says, "Thanks a lot but I guess it’s not meant to be because the payments are still too high." If we’ve already made a couple attempts at closing this transaction, psychologically, our customer is probably closed to us. So, instead of just jumping into some other technique, we need to first open them back up to us. Here’s how we do that, "You know what, Mr. Client, I’m sorry to say this, but you’re probably right. This just may not be meant to be. We can’t always make it work out for everyone but it wasn’t for the sake of trying, right? Thank you very much for giving us a legitimate shot at your business though."

We wait a beat or two and let that sink in. We open them back up to us by agreeing with them that it’s over, it’s not meant to be. Then we play to their fear of wasting time by continuing with, "But before you go, there might be another way to look at that $60 difference, and it might actually save you some time. May I quickly share it with you?"

Once they tell us yes, we have twenty seconds. Instead of just talking at them or using some other kind of logic to sway them, let’s engage them by asking, "You’ve been on vacation before, right?"

When they tell us they have, we continue with, "About how much per day would you expect to pay for a decent rental car?"

Let’s assume they tell us something around $35, we continue with, "Okay, you’ve got your $35 per day rental car reserved. Your airplane lands, and you’re walking through the terminal looking for the… the… ummm… the… COUNTER… where you’ve got your car reserved, right? When all of a sudden, out of the corner of your eye, you see a sign that says, RENTAL CARS…$10 per day! Would you quickly go check it out?"

So far, no salesperson has told me their customer has said they wouldn’t check out the $10 per day rental car. But just in case one customer does, with a smile on our face, we could point out to them that, "You wouldn’t try to save $25 bucks per day but you’re busting my chops for $60 a month? Just okay it right here, Sir."

Almost all of our customers will say of course they’d check it out, so we’d continue with, "Of course you would, and so would everyone else, that’s why the line is so long. But you’re patient, you get to the front of the line and ask the girl to tell you about her $10 a day rental cars. She tells you that all of them have about 86,000 miles on them. They don’t have the leather interior you want or the moonroof. They only have AM/FM radios, no CD player like you were hoping for and no navigation system. She tells you there’s one more catch. ‘While you’re renting the car, Sir, if there’s any mechanical problem, you are 100% responsible for it…up to and including engine failure. But I only have one of those cars left to rent. We’ve got seven $12 per day rental cars left, let me quickly tell you about those, okay?’"

When our customer says okay, we continue as the rental counter girl, "’They all are brand new cars, no miles on them. Coincidentally, all of them have leather interior, moonroofs, CD changers, and navigation systems. Best part though, Sir, is if there’s any kind of mechanical problem, you’re not responsible for it, it’ll be covered under the new car warranty. So, which one would you like, Sir, the $10 or the $12 per day rental car?’"

When they tell her (us) the $12 car, we continue (as ourselves now), "That’s the decision in front of you now, Mr. Client. If you leave here in the car you pulled up in, you’ve chosen that $10 per day rental car. Now, let me ask you something. If $2 per day, to get what you want, makes sense for a car you’d rent…doesn’t it make just as much sense for a car you’d own?!"

When they tell us it would, we say, "Then let’s wrap this bad boy up so you can start to show it off! Just okay it right here." or however you close.

The beauty of this technique is we gain credibility and leverage by using our customer’s past experiences. When we ask, "You’ve been on vacation before, right?", what do they instantly think of ? They think of their last vacation. When we ask them, "About how much per day would you expect to pay for a decent rental car?", what do they instantly think of? They think about what they paid last time. When we tell them, "Okay, you’ve got your $35 per day rental car reserved. Your airplane lands, and you’re walking through the terminal looking for the… the… ummm… the…", we want them to help us with the word "COUNTER!". Why? Because when they do, what are they thinking of? That’s right, Avis or Budget or where ever they rented their last car. Then, when we describe the $10 per day rental car, what are we describing? Their trade in, get it? The one without leather or the moonroof, etc.

Here’s the best part though, where are they when they bump themselves the $60 per month? That’s right!…in Hawaii or Cuba or where ever they vacationed last. Not at our dealership or in our showroom but in their "happy place" on vacation.

This, like all new techniques, needs to be personalized to our own selling style, our own selling rhythm, and our own vocabulary. Then it needs to be practiced until we own it. And like all other techniques, it’ll only work when we are willing to use it. Nothing works all the time, and neither will this, but let’s at least add it to our toolbox so we can have it at our disposal when the time comes to help that client of ours that just needs a gentle nudge to take action on the buying decision they’ve already made.
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Written by Michael D. Hargrove is President of Bottom Line Underwriters Inc.

The Secret to Overcoming the Price Objection

When you’re in vehicle sales, not a day goes by without hearing the dreaded price objection. Or is it really an objection at all?

There is no secret to overcoming the price objection. The truth is that the price objection cannot be overcome. That is because it is not intended to be overcome. It is meant to be resolved through facilitation by a salesperson. The salesperson’s role is to help the prospect work through the price concern as opposed to attempting to overcome it.

First, can we agree that it might not really an objection? It is a concern. I know that many sales trainers, including myself, call it an objection, but it may not be. It is an attempt by prospects to resolve financial questions in their mind. People want to feel good about decisions they make and that is why concerns are brought up.

The mistake many salespeople make is that they think they understand the prospect’s concern when the price issue is initially raised. A fatal flaw, indeed! The truth is that the cause for this concern isn’t initially known. A myriad of possibilities could be causing this to come up now such as:

[list:2bdc4s32]- Is it whether or not they can afford it?
– Is it that they saw a similar vehicle at a cheaper price?
– Or is it a salesperson being hyper-sensitive to the mere mention of price?[/list:u:2bdc4s32]

There are others, but you get the point. The bottom line is that without knowing what is causing the price concern, you can’t possibly help the prospect work through it. Some other price concerns center on whether or not prospects can financially afford your vehicle. A good salesperson helps prospects recognize the alternatives available to them for financing the purchase.

In other scenarios, the prospect has seen the same vehicle, or a similar one, at a lower price. The customer’s mind tries to make everything into an easy to understand commodity. When I worked in vehicle sales, prospects would compare my fully loaded vehicle in black with a stripped down version of the same color at our competitor’s lot. The comparison of the two was apples and oranges. A strong salesperson is able to explain the difference in a way that would lead the prospects to see the value in his.

The worst case is when the salesperson does not believe that his vehicle is worth its price tag. If this hits home for you, I highly encourage you to reconsider your employment options. If you don’t believe in your price, I guarantee you that no one else will either. If you believe that all sales ultimately come down to price, help me to understand this:

[list:2bdc4s32]- Why doesn’t everyone buy generic drugs?
– Why do people buy bottled water when they can get it for free from the tap?
– Why doesn’t everyone drive a Yugo?
– Why are people buying satellite radio when there are plenty of good stations available for free?
– Why do people have cable or satellite television when they can get a dozen stations for free?
– Why isn’t everyone shaving with a single-blade disposable razor?
– Why isn’t everyone drinking generic coffee?
– Why isn’t everyone fighting to sit in the last row at the ballgame?
– Why do people even go to a ballgame when they can watch it for free in their living room?
– How did your dealership get any customers at all? [/list:u:2bdc4s32]

I think you get my point. Thus, you really do believe that people will pay more if they feel the purchase is worth the price. Maybe you can’t afford the product you are selling. That is a completely different issue. There is a great expression that goes along with that. "Don’t spend the prospect’s money." You don’t belong in their shoes, so don’t put yourself there. You never truly know a person’s financial situation.

Look, no one wants to get ripped off. And everyone wants to brag that they got a good deal. So, if you can master the facilitation of the discussion around the pricing concern, you will inherently have more sales.

The Seven Golden Nuggets

It does not matter if you live in a blue state, red state, green state or purple state. It does not matter if you sell Kia, Ford or Mercedes. When the modern consumer steps into your showroom two things are certain: one, they would rather be sitting in the dentist chair than dealing with a car salesman and two, under no circumstance are they buying a car today, period. If you’ve been selling cars for one year or 20 years, I am sure you have heard every objection known to man:

[list:1cb72r5t]“I just want your best price (so I can go visit 3 of your competitors).”

“I really don’t have much time, (even though I drove 20 miles to get here on my day off).”

“We’re just looking for some information, (even though I know more about this car than you will ever know).”

Fill in your own objection: ____ [/list:u:1cb72r5t]
At our dealership, we grew tired of seeing the customer come in so defensive and the salesperson act so nervous. We brought in our training partner, to help us refine our sales and coaching process, build the skills our sales staff needed to sell more cars and create the tightest run most non-confrontational sales floor in the world.

We are able to accomplish this all with just Seven Golden Nuggets!

Golden Nugget #1: No Problem!

I recently saw a book titled “386 Secrets to Overcoming Sales Resistance.” I don’t know about your staff, but my guys just aren’t that smart (even 10 is pushing it). We learned that with the first Golden Nugget they could handle every conceivable objection. When a customer throws a potentially disruptive and distracting comment/objection at you, the last thing they expect to hear is “No problem …” We have found that responding with “No problem …” and a genuine desire to resolve the issue compels the customer to drop their ready for battle attitude.

Golden Nugget #2: Benefit

By using the “No Problem” the salesperson can regain control of the situation and steer the customer back on track. The salesperson can begin to uncover the customer’s true wants and needs so they can select the right vehicle to match those wants and needs exactly. Regaining control requires more information. To get more information from the customer, we need to provide a benefit. The good news is the customer actually provides us with that benefit any time they throw us an objection. To respond with a benefit to the objections listed above, we simply lead in with “So that I can …” and restate the customers request. For example:

[list:1cb72r5t]“So that I can give you our best price …”

“So that I can save you some time …”

“So that I can get you all the information you are looking for …”[/list:u:1cb72r5t]
Golden Nugget #3: Request

[list:1cb72r5t]“No problem” creates a climate where customers want to communicate with us; providing a “benefit” gives them a logical reason for agreeing to your “request”, which is simply this:

“May I ask you a few quick questions?”

“Follow me.”

“Please have a seat.” [/list:u:1cb72r5t]
Golden Nugget #4: Guest Survey

Now that you’ve disarmed the customer, slowed them down, regained control and have them seated in front of you, you better have a plan. With BZ’s help, we recently threw away our ugly yellow worksheets and created a colorful, informative sheet called the Guest Survey. The Guest Survey provides our sales staff with an easy to use, non-confrontational method of gathering all the information needed to uncover the customer’s true wants and needs. Some of the questions we like are:

[list:1cb72r5t]“Are you adding a vehicle or replacing your vehicle? Would you like an estimate?”

“What do you love about your current vehicle? What are some things you’d like to improve about it?”

“What are some of the things you must have? What are some things you’d like to have?”

And my favorite…

“Of everything that’s important to you, what’s the one thing you hope to accomplish with your visit today?” [/list:u:1cb72r5t]
Golden Nugget #5: Confirm and Clarify or C2

Throughout the Guest Surveys it is very important to develop and use Golden Nugget #5.

Confirm and Clarify (C2) is a communication skill our sales people use to dig deep and explore the valuable information the customer is providing us. By listening and confirming you are showing respect. The goal is to confirm and clarify the customer’s response.

[list:1cb72r5t]“When you say safety is important to you (confirm) what do you mean by that? (clarify)”

“You said you needed more room (confirm), what do you mean by that? (clarify) … Tell me more.”[/list:u:1cb72r5t]
It’s amazing how often we assume we know what the customer meant only to find out that we were way off base and would never know that without C2. It is also amazing how much you learn about the customer and how you can develop common ground.

Golden Nugget #6: Sim/Sim (Offer Alternatives 100 percent)

The last question we ask our customers before heading out to select a vehicle is this:

[list:1cb72r5t]“If there were a similar vehicle, with similar equipment that was a better value, would you consider it, or should we rule that out?”

or…

“If there were a similar vehicle, with similar features that could save you some money, would you consider it, or should we rule that out?” [/list:u:1cb72r5t]
This one question is important to gauge just how flexible the customer is and to set the stage for an alternative to what they originally asked for. Statistics show that 86 percent of new and used car buyers leave with something other than what they originally came in to purchase.

Golden Nugget #7: Stamp the Hood

Once we’ve selected, presented and demonstrated the vehicle, our salespeople are trained to ask one very important question,

[list:1cb72r5t]“On a scale of one to 10, 10 being the best, how would you rate the vehicle you just drove?” Nothing new about a trial close, but what we do with the customer’s response can make or break the deal. If it’s a seven or better, the salesperson is trained to respond with, “Great! What do you like that makes it a 7?” This gets the customer to articulate what they like which builds value and gets them to sell themselves. The salesperson would then ask: “What would make it a 10?” A response of less than seven indicates that we may need to select a different vehicle. We save so much time by not going to the desk with fives. Once the salesperson has executed the Seven Golden Nuggets, it’s time to visit the coach’s desk to determine what we need to do to sell a car today. [/list:u:1cb72r5t]
Following a clearly defined sales process that is built around the Seven Golden Nuggets has brought consistency to our sales team and desk managers; consistency reduces turnover and increases sales.
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Written by Kyle Miller
Contributing Author
Miller Family of Dealerships

What’s Your Best Price, Bottom Line

When I was a new sales person, or a “green pea”, customers would ask me, “What was the best price on every vehicle?” I remember telling the customers the MSRP $30,000 and then, in a whisper, telling them I sold one yesterday for two thousand less then our asking price. The customer would look at me and smile. So off on a test drive we would go. After we had completed the demo drive the customer would ask again, “So! Darin come on, tell us, really what’s the best price you can do it for?” And before I knew it, I would be negotiating right on the lot. I would even tell them we could probably take more than two thousand off. These customers loved me. So off to my office we would go. I would then pull out a worksheet and fill in the information on the car and write down the selling price which of course they would question why I wrote that number. Then I would ask them for an offer, wrong move, (see Negotiating Gross Profit posted in the AutoDealerDaily article archives) and then they would say “we want a four thousand-dollar discount”. I would question them on how do they think we can take off four thousand dollars and they would respond with, “come on Darin you can get it for us, just go and tell your manager that’s all we are willing to pay."

So off I would go to see my manager, telling him that these people are going to buy “Now Today” and he says: “tell them we can give them a savings of $400.” I tell my manger that they only want to pay $26,000. He asks me how they arrived at this number.

I would hesitate and then tell him a little white lie, “I told them I could take off at least $1,000 and then they said…”

My manager would then say to me, “Darin, how do you get all of these crazy, low-ball, no gross customers?”

You all know the rest of this story; if we even get the deal, the gross would be so low that it’s almost not even worth doing.

Every customer wants the Best Price. Give it to them, but “DO IT RIGHT”

If there were a prize for the most asked question in car sales, “What’s your Best Price?” would get it hands down. How you handle this question will determine IF you sell the vehicle and IF you maintain any gross profit.
There are three points during your selling steps where you will and do hear this question. The following are some of the best word tracks you can use.

Point 1

When the customer says,

“What’s your best price, bottom line?” during your vehicle presentation, try one of these.

[list:2hp8kcey]- Mr. George, I’ll be more then glad to give you the best price, but I have to make sure that we pick the right vehicle for you. OK?

– Mrs. Allen, my job at the dealership is to help you find a vehicle you really want, and then I’ll give you the best price. OK?

– Ms. Lee, we can be flexible with our prices, but I have to make sure this is the vehicle you really want. OK?
(Always proceed with your presentation, demo etc…)[/list:u:2hp8kcey]
Point 2

When the customer says,

“What’s your best price, bottom line?” during or after your demo drive, try one of these.

[list:2hp8kcey]- Sure Ms. Lee, when we get back to the dealership, I’ll go and get you the best price. OK?

– OK! Mr. Gregg, follow me, and we’ll go and get you the best price.

– Great! Mr. Smith. So you liked the ride and all the features of the vehicle? OK then. Follow me, and I will get you the best price, bottom line. [/list:u:2hp8kcey]
(Always proceed with selling the dealership, asking for the order, the worksheet, etc…)

Point 3

When the customer asks the world famous question in your office, at the start of your negotiations, just tell them:

[list:2hp8kcey]- Great! No problem, I’ll get for you the best price right now. (Proceed with asking for the order, the worksheet and then negotiate.) [/list:u:2hp8kcey]
Always ask yourself, why is this customer buying from my dealership?

Darin’s Wrap Up

It all boils down to timing and wording. I know not every deal is or will be a high grosser, but if you hold on until the timing is right, you will be able to increase your average gross by $500. Practice your timing; when and what you say, and how you say it. Have fun and keep your eye on the ball.
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Written by Darin B. George, Founder
Automotive Sales College
888-681-7355

You Can Handle the Truth

Objections are as much a part of your job as they are for any judge in a courtroom. For sales pros, they’re the reasons customers don’t want to move forward with their purchase . The trouble is that the objections your prospects cite and their true concerns are not always the same thing. Your challenge, then, is to seek out the true reason for each objection you hear.

As a professional, it’s your job to understand the real objection behind the spoken objection—don’t just respond to the stated concern. This assures you maintain credibility with the prospects and earn their trust to continue with them on their car-buying journey.

Picture the following scenario: You’re talking to a customer. They’re engaged in the discussion, you’re in the rhythm, and you’re feeling fine. Then, for some reason, they tell you they have some concerns about the manufacturer. They liked it five minutes ago, you think, so you launch into all the reasons why your product is so perfect. You make a foolproof case, but then they utter the dreaded six words, “We need to think about it.”

Why? Because you handled the wrong objection. You thought they did not like the overall manufacturer; that is, after all, what they seemed to be saying. However, that was not their true concern. If you had taken the time to dig a little deeper, you would have discovered that they do like your manufacturer; but they’re concerned that the car you showed them may not have great resale value. You did not seek the true concern, so you missed your opportunity to address it. Think back to the last time you addressed the spoken objection before seeking the true objection. Were you afraid of the customer’s concern? Did you think you understood the objection, only to find out later that you didn’t? Conversely, can you think of an example of a time when you asked clarifying questions and discovered that the objections weren’t as hard to address as you thought they were?

Whenever your prospects hesitate about your manufacturer, cars, or features, dig a little deeper and ask clarifying questions that help you uncover the real objection before you start defending your position. Seek the truth behind the objection by using clarifying questions such as, “Why are you concerned about _________?” and “What is it about the manufacturer (color, size, etc.) that bothers you?”

Never start talking without understanding the true objection. The best way to ensure that you have successfully sought the truth is to restate what you heard back to the customer. Whether you are right or wrong, the customer will tell you.

The good news is that your prospects aren’t on the stand in a courtroom, and they want you to know what they’re looking for. So do them a favor, and ask them questions that help them communicate what they already want you to know.

That’s right. You can handle the truth. And you must.
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by Jason Forrest
http://www.forrestpg.com/

The Four Square Presentation

A four square presentation presents four items to your customer:

* Selling Price
* Trade Allowance
* Down Payment
* Monthly Payment

When you have asked your customer for a commitment to purchase pending all terms being agreeable the items in the four square set out those terms. How you present them is almost as important as being able to effectively negotiate if they raise an objection to one of the figures.

When you present the figures to your customer you must do so with confidence. That is difficult to do if you do not understand them yourself. Be certain you do. Ask your manager if you have a question about one of them. Customers like to do business with knowledgeable people. If you appear hesitant or unsure they will perceive it negatively.

After you receive figures from the sales desk make certain you are seated before you say anything. Salespeople often make the mistake of starting the presentation of numbers while they are still moving toward the customer. This creates an uneasy feeling. Use a pen to indicate each of the figures. Speak slowly and clearly, this is not the time for lack of communication.

Your presentation of the four square should sound something like this…

[list:3kahfe2b]"Mr. Customer, this is the selling price of the vehicle you are purchasing. Based on miles, equipment and condition your trade allowance is. Our lenders generally ask for a down payment of (this will be a dollar figure or range of figures)which will set your monthly payments in the range of."[/list:u:3kahfe2b]
Short and to the point. As it is designed to do the four square presentation gets your customer to react to the figures, perhaps more than one. This reaction is what opens the door to negotiation and a successful close based on agreeable terms.

What do I say if they object to one of the figures?

Four Square Presentation – Sales Price

In your four square presentation sales price is the first figure you present. As you know the four square presentation is designed to do two primary things. The first is to get a reaction to one of the figures. The second is to focus your customer’s attention on down payment and monthly payment.

This page deals with sales price. The other figures in the four square presentation have separate pages and can be found at the following links.

* Trade Allowance
* Down Payment
* Monthly Payment

The reaction or objection to the selling price will generally fall into only a handful of responses. The customer will say "the price is too high" or "what’s the invoice" or "I have a better deal at your competition." Let’s begin with the last response.

Whether they do or not is not the question. Your answer to it will make the difference. Many salespeople have received auto dealer sales training that taught them to respond this way…

"So if I could match that deal you’d buy right now?" or a variation on that them. Do not repeat the mistakes of others.

Get the facts before you do anything else. What are the facts you need? The ones your customer will give you. If you ask the right questions during the foursquare presentation sales price may be a figure that’s not a real one.

* Make
Customers not only shop different dealerships, they shop different makes. Perhaps the price they have is for a vehicle that does not compare to the make you sell. There is a reason some vehicles are more expensive than others.

* Model
Differing traim levels and equipment packages play a huge part in selling price. You cannot by a standard model for the price of the top of the line model. Find out what equipment and trim level they received the price quote on.

* When did they get the price?
Today? Last week? 3 months ago? Things change in the car business. Perhaps the price they have includes a rebate that is no longer in effect. Find out.

* What was the condition?
Maybe they received the price on a hail damaged unit. Maybe is is a demo with lots of miles. Those affect price. Find out if this is the case.

* Did the dealer have the vehicle?
Anyone can price a vehicle that doesn’t exist.

* Was the offer made in writing?
Or was it a "low-ball" price they were given as they left? The customer goes from dealership to dealership and cannot figure out how the first guy was so much cheaper. Of course, when he goes back the story will change.

* If the dealer accepted your offer why didn’t you complete the deal?
Perhaps the price was agreeable but the payments were not acceptable. It may have been interest rate. It may have been the trade allowance they were offered. Find out what prevented them from taking delivery and do not make the same mistake.

The customer who objects to the four square presentation sales price has usually made his mind up to buy. What he fears is paying too much. Find out the facts, work with the desk and turn this customer into a delivery.

Four Square Presentation – Trade in Value

The trade in value a customer receives when purchasing a vehicle creates as much, if not more, confusion as the discussion about dealer invoice on new cars. If you will learn some important principles about what vehicles are really worth it will help you provide better answers for your customers.

First, let’s define what trade in value really means. It is the amount shown on the purchase contract that is deducted as an allowance from the price of the vehicle they are purchasing. Gosh, that’s easy to understand, right? Not always.

There is a difference between trade in allowance and what the vehicle is worth as a cash asset to the dealer. The dealership’s valuation of the vehicle is called Actual Cash Value, or ACV for short. This value is what the dealership will use as their cost when they put it on their books as inventory. During the buying process the used car manager of the dealership will evaluate the customer’s trade in. Based on valuation guides such as NADA Value, Kelly Blue Book, Black Book, Auto auction reports,etc. the dollar amount is set.

Included in the used car manager’s decision about value will be vehicle condition, mileage, optional equipment, color and market conditions for demand. My purpose here is not to educate you on how to appraise a used vehicle. Just some information about how the ACV figure is arrived at. Now it is time for some simple arithmetic.

If the used car manager sets the ACV of a vehicle at $10,000.00 and the customer receives a trade in value, or allowance, of $11,000.00 the customer has actually received a discount of $1,000.00 from the selling price of the vehicle they are purchasing. This is known as an over allowance. Any amount given to the customer as trade in allowance that is more than the ACV is an over allowance, which translates into a discount from the selling price.

Now, let’s go back to the trade in value and look at it from the perspective of your customer. First, it is their vehicle. They liked it enough to buy it. They have driven it for some time. It has been part of their family. They have even given it a name. Trading it in is an emotional experience for them. What they think it is worth has some emotional value. To the dealer their vehicle is simply a commodity. Is it any wonder that the value of the customer’s vehicle, in their mind, might be more than what it is really worth when you consider their emotional attachment to it?

Earlier I told you how the used car manager sets trade in value. Let’s examine how the majority of your customers set the value of their vehicle.

* They look in the newspaper
* They call their bank or credit union and ask for NADA value
* They saw one like it for sale somewhere
* They have a loan on it and it’s got to be worth at least that amount

As you consider each of these valuation methods think about how easy it is for a customer to arrive at a figure that may be unrealistic. Start with looking in the newspaper.

There are usually two types of vehicle for sale ads. Those placed by dealerships and those place by private sellers. Because of the cost of ads the descriptions are abbreviated and advertisers use as few words as possible. So, we look at the ad and what we do not see are generally items like mileage and condition. (An unusually low price will indicate high miles or poor condition.)Your customer will look for the highest price to set their value. Without looking at the vehicle offered for sale, driving it or assessing the mechanical condition they will assume their vehicle is the same.

Your customer may ask their lending institution to help them set the value based on blue book or NADA values. Because of their emotional attachment they think their vehicle is extra clean. In reality, very few vehicles fall into this category. Without driving the vehicle, assessing reconditioning costs or considering market conditions it is almost impossible to determine the value of a vehicle using only a book.

DO NOT use the argument so many salespeople have that offends customers.

I have heard salespeople say, "If your bank thinks it’s worth that have them write you a check." You might think this answer is cute but remember, the customer, at this point, trusts their bank more than you. Granted, the bank is not in the car business and dealers don’t tell them what interest rates to charge but if you try this tact you will alienate your customer.

Four Square Presentation – Down Payment

Down payment is another term of sale that you will negotiate with your customer. Understanding why it is important and being able to show your customer the benefit of putting cash down will help you sell more cars.

Why is it so important? There are really several reasons. First, it will make it easier for a lender to approve the loan. This is especially true if your customer has, for some reason, less than great credit.
The next benefit to the customer is saving money on finance charges. True cost of ownership isn’t always about selling price. When a customer makes a cash down payment they are also reducing the amount financed. When time comes to trade again they have reduced the chance they will have negative equity.

Does every customer have to put money down? No, people with good credit can often buy a vehicle with no cash out of pocket. Your job is not to tell a customer what to do. Your job is to show them the benefit of doing so and let them choose what is best for them.

The next benefit of a cash down payment is that by reducing the amount financed the monthly payment will be lowered. Your customers will understand this benefit if you will show them.

How do you ask for a down payment? Here is a word script to help you.

[list:3kahfe2b]"Mr. Customer, as you know down payment affects monthly payment. In order to keep your payments as close to your perfect figure as possible, how much can you put down today?"[/list:u:3kahfe2b]
This is the typical customer response…"If I put down $$$$$ what would my payments be?"

Don’t answer the customer with a dollar amount. You are locking your customer down on a figure. It usually sounds like this, "Oh, for every $1,000 you put down the payment changes by about $20-25 dollars a month."

Why not try this instead. "Mr. Customer I am not sure. I am going to ask my supervisor to refigure the payment with ($$$$$) down. While I am gone would you do me a favor and consider giving me some additonal help on down payment in order to stay closer to your perfect monthly payment? Thanks, I’ll be right back."

Four Square Presentation – Monthly Payment

In a four square presentation monthly payment, for most customers, is the bottom line. People are conditioned by advertising to ask "How much down and how much per month?" The four square presentation is designed to focus the customer on this concept. The payment is only one item you will present during your four square presentation. The other three are discussed at the following links.

* Selling Price
* Trade Allowance
* Down Payment

During a four square presentation monthly payment objections are typical. The payments are too high. Or they should be. Why? Because good sales managers know to pencil the first payment based on short term. Offering the customer a 60 or 72 month payment on the first pencil leads to lowered gross profit. Why?

If the payment is too high on an extended term the only way to lower the payment is to either get more cash down, raise the trade allowance or lower the selling price.

Unless the customer increases the down payment the other options result in a reduced selling price.

This is another place where we will take a side-step. One of the questions the four square monthly payment presentation raises is this…

What’s the interest rate?

Most salepeople fumble this question by saying too much or too little. Either one is not the right approach. One only raises additional questions and the other appears to be evasive. Answer the question and move forward by using this statement.

[list:3kahfe2b]“Mr. Customer, the rate is set by the lender based on several things. The amount you are financing, the initial down payment and how long you choose to finance your vehicle. My business office will explain the lenders guidelines to you and then the decision of what is best for you is all your’s. I know they have some great options available because nearly all my customers choose to finance here at the dealership.”[/list:u:3kahfe2b]
Don’t forget to ask for the business at this point…"So, Mr. Customer, it sounds to me as if the other figures are agreeable. Let me commit them to paper and my business office will answer your interest rate question." Now you can either prepare the paperwork or answer any other objections.

OK, back to the four square presentation monthly payment. In step 2 of the road to a sale you found out what the customer’s current payment is on their trade-in, right? Here is why it was important to find it out. Let’s use a hypothetical.
Say their current payment is $350 . The payment you showed them on your four square is $550 . As you present the number instead of saying five hundred fifty why not say…"your payment is only 5 or 6 dollars a day more than your current payment." Sounds smaller than $550, doesn’t it?

Equate the difference in payment to the smallest daily amount…"It’s only the price of a soda pop and candy bar a day more than you are paying now."

The Open-Ended Close

Consider this unique way of asking for the sale

The Direct Approach

As trainers we strive to make certain that sales professionals are clear about asking the customer for their business. When it comes to closing, we usually recommend a direct question that can only be answered yes or no.

These include questions like:

[list:1du81rq5]- Doesn’t it make good sense to take advantage of this special offer today?
– Wouldn’t you like to take delivery on your new vehicle right now?
– Shall we get it cleaned up for you?
– The options approach[/list:u:1du81rq5]
Another recommendation is to provide the customer with options. This includes asking questions like:

[list:1du81rq5]- Which payment plan looks best to you?
– Which of these models do you think best meets your needs?
– The open ended approach[/list:u:1du81rq5]
Sometimes you have a customer – or a sales professional – who prefers a softer approach to asking for the business. There are also companies who insist on a more customer friendly, low pressure approach to car sales. For them, we have the perfect solution. After showing the payments to the customer, follow up with this statement:

"Well Mr. Smith, it’s usually at this time when the typical salesperson begins to apply the pressure. But I just have one simple question I’d like to ask:"

"What would you like to do?"

If the customer is ready to buy, they will simply say, "I’d like to buy the car!" If they have any concerns, they will express them here in the same way they would if you asked a direct question. Rather than responding, "No, I need to think about it", they’ll reply, ‘Well, I really need to think about a few things first’.

Benefits of the open-ended close

When presented effectively, here are some of the benefits of using this approach with your customers:

[list:1du81rq5]- The customer can’t respond "No"
– Negotiations are entered into with less tension
– You get right to the point of any concerns quickly
– It fits well into consultative selling approaches
– It allows the customer to open up and close themselves even stronger than you could close them[/list:u:1du81rq5]
Keep in mind that you can’t shortcut the processes of Fact Finding, Presenting, and Demonstrating the vehicle. Those things must take place before asking for the business. And while this approach may not be for everyone, it’s another tool in your sales arsenal that will help you be more effective with a wide variety of customers.
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Written by Shawn Ryder
Auto University
http://www.autouniversity.com
shawn_ryder@autouniversity.com

The Price Myth

Survey all of the salespeople in the world, even entrepreneurs. You’d find that most believe that price is the number one reason people don’t buy their product or service.

This is absolutely NOT TRUE.

Many sales are lost because people within the company incorrectly believe price is the reason customers do not buy their product. Earning business is ultimately about getting the buyer to fall in love with the product and/or getting the buyer to have complete and urgent confidence that the product or service offered will solve their problems better than any other!

The Price Experiment-

I once had a salesperson tell me that if the price of my seminar tickets was lower he’d be able to sell twice as many tickets. To prove a point I put on an experiment to show that a lower price would not create more sales. I offered a Grant Cardone seminar in Detroit at one-tenth of the normal price. Detroit has always been one of our best-attended seminar markets so it proved an excellent testing ground.

There was only one stipulation to our little experiment to properly test out his little theory. The sales person would not be allowed to sell the product, so that we could determine if price alone would sell the ticket.

Result: the lowest attendance of any seminar I have given in twenty years. Sixteen people bought tickets for 1/10 of the normal price and we normally have four hundred in attendance.

Reality – if price will get the job done there would be no need for salespeople anywhere and that would create a problem for 25% of the world’s workforce.

Reality – If the company keeps reducing the price there will be no margin left for commissions resulting in a problem for 25% of the entire worlds workforce.

Reality – Price is never why someone will or will not buy something from your company, they buy because of love and confidence. If you want a successful career in sales or you want a successful company you must completely dismiss the idea that price is the reason people buy or don’t buy your product!

Also, price is not your problem to solve, but should be the customer’s problem to solve. Your problem is to get people to fall in love with your product to the point that they don’t want to spend another second without it! If you are selling a service or product that doesn’t have that love connection then you have to make the buyer confident enough in your product that they want to pay your price because they know that it will improve their company somehow or solve some problem that they want handled!

Even remotely entertaining the concept that price is the reason people don’t buy, will result in you failing! This belief should be treated like the plague in any organization and cut out before it becomes the demise of the company.

Just this week ATA, Skybus and Aloha Airlines went out of business partly due to the belief that price could sell their services!
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Written by Grant Cardone, CEO
(from "Selling: the Secret to Success" by Grant Cardone)
800-368-5771

The Price vs Value Issue

Most poorly trained salespeople tend to react to prospect price resistance by lowering the price because they feel that they must do this in order to win the business. Believe me there is a lot more to handling price resistance than is evident at the first pass.

Any price will always seem high to a prospect or customer if their perceived value of your vehicle is low. Price resistance is one of the best ways to get a feeling for the value your prospect has for your offer. If price resistance is low or non-existent you can feel fairly sure that they have a high perceived value of your product or service.

The key to effectively handling price resistance is to understand this simple, yet profound, concept – people generally say they want low price, but what they really want is low cost. What is the difference?

Low price is what a customer pays for your vehicle now. This is what is deducted from their checkbook and deposited into yours. Low cost is what they pay for your vehicle over time. For example, if they buy an inexpensive vehicle to save money, but it is in constant need of repair because it breaks down frequently – they had a low price but a high cost. Although they may have saved money initially, their cost over time will be much higher than if they had invested more in a better vehicle.

In most cases in life we get what we pay for. Buy cheap and you get less value or higher cost. Buy expensive and you get higher value or lower cost over time. Granted this is not true 100% of the time but it is as a general rule.

Price is what you pay for something. Cost is what it costs you over time.

What are you selling – high value or low cost? Many salespeople would rather sell a higher priced vehicle than a low priced one. It is much easier to justify high price if the value is there, than poor quality and constant product/service problems when the value is missing.

Remember, the key to success in selling is building strong relationships. Poor quality, even though customers save money, is not in their best long-term interests. How do you want to be remembered by your customers? Low quality – or a good value at a fair price?

Consider for a moment the simple thought – if two people want to do business together they will not let the details get in the way. By the way, the converse of this is also true.

Quick Tips for Grossing Higher Per Deal

Being productive, quick tips for grossing higher per deal and the importance of product knowledge

HOW TO HOLD MORE GROSS?

Are you just fed up with giving vehicles away at invoice or worse below invoice? You should be, because that’s exactly what most average salespeople are doing. Too much money is left on the table because of the lack of value the salesperson built on the product. So instead of using value to close the sale, the salesperson closes the sale on price.

TIPS FOR HOLDING MORE GROSS:

[list:1r49hzec]• Greet every customer properly and use the word "Welcome" in your greeting. Welcome holds a warm feeling. So get used to using "Welcome" in your greeting.

• Start building rapport as soon as possible. You have to find common ground with them. Learn to make a new friend and make them feel comfortable. The selling part comes later. Talk about something else other than buying a vehicle.

• Stop pre-qualifying. Treat every customer as if they are here to buy. If you start to pre-qualify, you miss out on many sales that you could have closed. If they came to your dealership, assume they are here to buy from you and buy your product. Period!

• Slow down and qualify properly so you can show them the right vehicle. Skipping this critical step will results in going from vehicle to vehicle and chances are you will miss another sale.

• Build value in the product and stay off of price questions on the lot. Presentations and demonstrations will only build value in your product. So this is a must.

• Ask for the order with confidence. If you don’t ask for the order, then they will just ask for your card and say "They need to think about it".

• Learn to use other techniques to close the sale, rather than using price. Unless you enjoy selling at cost or below cost, stop using price as your only closing tool.

• If you can’t sell to them, then quickly follow up and bring them back in before another salesperson down the street sells it to them. Because it is a proven fact that they or someone they know will buy a vehicle now or somewhere in the future.

• And start prospecting to work with other groups of customers having a higher closing ratio rather than waiting on a walk-in customer. Get on the phone, start using mailing and the computer. Prospecting will help you grow as a salesperson and keep you out of the huddle. And remember, growing as salesperson will only result in your income to increase. [/list:u:1r49hzec]
PRODUCT KNOWLEDGE AND WHY YOU NEED IT:

The shocking truth I found out about most average salespeople is that they don’t know enough about their product. It is embarrassing to see a customer ask a question about the product and the salesperson has to read it off of the window sticker or the brochure to answer the question. The customer could have easily done this on their own.

You must get in the habit of knowing everything about all of your products and your competitors. This way you can fully answer any question or concern that is your customer might have. Learning product knowledge is not that hard. Because with all the help most manufactures give on product knowledge, it should be easy for you to learn. But retaining all that product knowledge is quite difficult. And that is something that you need to revise constantly on a daily basis.

Now I’m not saying spit out everything you know about the product until you bore out a customer, because that will not be effective. But you must know enough to handle any questions or concerns that they may have. So yes, you need to know everything.

Find the customers hot buttons and use your product knowledge that pertains to the customers buying motives to build value. Instead of sitting around drinking coffee a million times a day, smoking cigarettes, or staying in the huddle, spend some time learning product knowledge.

Spend some time researching about your products and of your competitors. And don’t be cheap, spend a few bucks and subscribe to automotive magazines like Car & Driver and the alike. This will keep you in the loop of the automotive industry and increase you product knowledge.

BE PRODUCTIVE:

I have written numerous articles giving you examples of ways to keep yourself busy at work. All of these examples will increase your sales and make you more productive. Just think for a minute. Out of a full work day, how many hours do you really put into work? And hanging around, smoking, drinking coffee and ordering lunch does not count towards work. Chances are you only work a few hours the most at work.

So just imagine the results and income you can achieve by putting in a full days work by doing some of the examples I gave earlier. If you want to earn like a professional, then learn to become a professional. A professional looks for self improvement and growth. Continue to grow as a salesperson and your income will automatically grow.
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Written by Mak
Nawab Learning Group, Inc.
http://www.nawablearninggroup.com/