Thank you both, calgm988 & TheOne, for your comments, observations and challenges. TheOne, I particularly liked the observation that I offered no solution! You are correct, I didnt know if anyone really cared. My response is long, but its not exactly a minor league topic were addressing. Fixing the sales process lowers the cost of sale, increases the profit, and drives up the customer loyalty factor.
First of all, I am not attacking Real Sales Managers there just arent many, not due to a lack of commitment or talent among sales managers, but due to the process most know and have worked within their entire careers and a complete lack of good training for sales managers. Compounding the problem further, while most managers receive no training, sales people are more often than not provided training that accelerates their failure. As an example, the next time you hear someone talk about a sales person whose productivity was great when they first started, then tailed off as the months went by, think about this...When someone starts selling cars, they do the only thing they know how to do, they use the manners they taught growing up and they treat people as nicely as possible, because regardless of what industry or job they left, someone taught them that being nice and liked by a prospect was necessary to making a sale. Then the dealership "trains" them to be car sales people. Managers load their lips with some of the most inane statements and ridiculous questions known to civilized society. Trainers give them sales advice that's 40 years old, the sales people are made to look like buffoons to their customers, and performance suffers. The smart ones figure it out in time. They get it that the tactics theyre asked to use are counterproductive and they resort to subverting the process in order TO sell cars (thats why in many cases, the least trained sales people are the most productive!). The majority do as they are taught because they mistakenly figure no industry would teach skills and tactics that would accelerate their failure! They fail, they leave the business, and the beat goes on...Sales people aren't all bad; most of what they're taught to do and say is bad. The industry's frustration with sales people is a product of the training they get and the process they work, not he sales people themselves. (Show that sentence to any sales person and you'll get an "AMEN!") A sales process shouldnt require you to disregard all youve learned about how to treat people, it should require you to apply it! The "car salesman's" reputation is a "learned skill," it's not a trait.
My issue (as well as the consumer's) is with the process that brings people into the business and trains them to fail; my issue is with the stereotypical desk manager that manages numbers and deals, not people and subtracts value from the sales equation.
As regards the observation that the "rest of the business world doesn't have negotiable products with the costs of such products and incentives to the dealers posted for all eyes to see - that sounds suspiciously like we have a unique business. Thats not completely true, the retail automobile business has unique properties, yes, but many of them are self-inflicted. Any business to business transaction involves price based negotiations, transparent of identifiable costs and an automobile purchase is much more of a business to business purchase than buying a pair of shoes. Consumers can buy nearly everything any retailer sells cheaper somewhere else. Profit? - Most people know a $2,000 mens suit has more mark-up it than most auto dealers make on the sale of a $30K vehicle! In fact a survey done by ZAG suggests dealers leave money on the table. I quote, When Zag asked 1,000 consumers what they thought a fair profit would be for the sale of a $40,000 car -- with all marketing and overhead costs considered -- 72 percent were willing to give dealers more money than the typical return, which is less than $1,000 in profit per new car sold.
The largest group of respondents -- 21 percent was willing to part with $2,000, while 18 percent upped that to $2,500 and 17 percent were prepared to go higher than $2,500. Another 17 percent put the figure at $1,000; 16 percent pegged it at $1,500. Just 11 percent of respondents said $500.
Why do dealers makes less? To paraphrase one of the most successful political slogans in US election history, Its the process stupid!!!
There is a solution, practical, practiced, consumer embraced, and welcomed by automotive sales people, coast to coast. Everybody parrots the phrase build value in your product and the customer will pay you a better profit. Thats crap. There is one primary reason grosses are low and vehicles are treated like commodities, the sales strategies and tactics taught by most trainers and managers do nothing to help the sales team create value in the numbers themselves. The numbers include price, discount, trade-value, payments (lease or purchase), initial investment or rate. Sales team member are taught the WRONG way to present, defend and justify the numbers. The negotiation tactics employed by 95% of the dealer body, including the publicly held companies and Ive shopped Penske, Asbury, Sonic, AutoNation stores all in the last week, ruined any trust or credibility the sales people built with me (and I only met one sales person who didnt seem to be intelligent and well-meaning).
My expertise is justifying and creating value in the numbers, incidentally, the failure to justify the numbers is the main reason the one-price concept has failed in most instances. I sell cars, and I didnt learn how to do it right until I sought help from outside the industry. When it comes to negotiating; my interaction with the consumer is faster, more effective, and more pleasant for the consumer. It is simple stuff, but its not the way weve always done it. It takes about 45 minutes to demonstrate to anyone how much more effective it is for all parties involved.
But an industry that has a monopoly on selling the most popular product in the history of mankind, run by very rich people, has had no reason to change. Maybe the present catastrophic nature of the business will change that? Well see. Merry Christmas to you both and heres to wishing you an awesomely successful New Year. Steve
------------------
[This message has been edited by Steve Richards (edited 12-21-2008).]
[This message has been edited by Steve Richards (edited 12-21-2008).]