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What ways could dealers be more transparent, IDEAS anyone?

What's your exact solution.

A new sales staffing model.

  1. Have a fun product specialist who carries the customer from the greeting through the test drive. The party person.
  2. Have a technology-capable person who is skilled at negotiation who will handle all the paperwork and any back & forth. The smooth negotiator who knows how to work a computer.
  3. Finish things off with a very thorough product specialist who can set the vehicle up, make sure it is properly cleaned, and then have the time to provide a strong delivery of the car and the service department. The delivery specialist.
On point #2 this person will now be able to speak to the strengths of the car along with setting things up for finance products and extended maintenance/warranty agreements. A lot of the time the sales agent talks the car up and then the F&I manager talks about how quickly it is going to break. This can put the customer at odds. And this one person can kill the odd feelings that occur on the transition from the test drive to "let's go inside."

On point #3 pay plans are currently not tuned to push a good delivery. People do okay deliveries because of CSI needs, but they're paid more on selling cars. Once the customer is contracted a sales agent wants to get another sale and the delivery a customer really needs can be shorted.
 
First:

RE: "Are you saying that we shouldn't change a thing, but rather should just make our sales people better negotiators? Sorry....we've been trying to do that since Henry Ford's assembly line made the car something for the masses."

The assembly line has been changed and improved since the beginning. You might even use the term "evolved."

Second: All the wishful thinking in the world won't change the fact that ours is a business of negotiation.

Third: Whose nickel will you try this new approach with? Have you ever run a dealership with P&L responsibility? People have been trying to reinvent the wheel for decades. I think you have a solution in search of a problem.
 
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Well ruggles,

I can see that you're quite happy with the way things are. I can respect that with 45 years in the industry and some sort of business built on improving the old ways. With your age and experience I would like to extend you a level of respect.

But I disagree with your stance, and that's totally my prerogative. With all that said I stand firmly by my theory and would absolutely throw my own dollar at giving it a go. Maybe some day I might ;) ....until that time I'll just have to continue looking at the world through the lens I have currently. Admittedly, it is a rather large lens based on some prior budgetary ownership within a decent dealer group. I'd like to think my theories are not unfounded.

But anyway, welcome to DealerRefresh and I'd like to see you continue to bring an opposing viewpoint to the community. Old vs. New School definitely has some good quandary to bring varying opinions.
 
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As sales professionals we should relish the negotiation and become good at it. After all, that's the justification for our income. If all we are going to do is to become clerks, out job won't pay so well.
The idea that our jobs rest on our ability to negotiate is the single biggest factor that separates the 'old school' from the 'new school'. Negotiation is not a hallmark of great salesperson. Indeed, I would contend that the ability to justify your asking price takes more 'sales talent' then negotiating away some of the profit. It is time retire the idea that negotiation requires more talent and that selling for your asking price is something only 'clerks' do.
 
Dealers aren't concerned in what might be "old" or "new." They are interested in what works the best. Whether anyone likes it or not, as long as there is an FTC, auto retail will remain a business of negotiation. Negotiation IS the hallmark of a great sales person. Justifying your price IS negotiation. Making up your own definitions doesn't change any of this. If negotiation as a skill is taken out of the equation, sales people will be paid as clerks. The question is which method of negotiation do you want to employ. There is no "old" versus "new." 45 years ago it was common for many dealers to quote a price, then try to justify it. It ain't "new." It is time to retire the idea that pretending to not negotiate isn't negotiation.
 
Someone had mentioned Apple on the Facebook post, so what if the OEM's took Apples approach and forced dealers to sell the products for the same price? How would you like that, would it be good for dealers and customer alike for that Ford Fusion to be the exact price no matter which dealer you walked into? It would then be on the dealer to create a buying experience that customers wanted to be a part of to drive traffic.

Don't get me wrong I know this will never happen and would create havoc in the industry but having too much free time on my hands got me to thinking.
 
The Apple approach works because Apple owns and controls its own outlets. The FTC isn't likely to approve independent franchised dealers all selling the same car for the same price. Even if they did, trades would still have to be negotiated.

Regarding the issue of non negotiation: It is easy to let a customer walk if they don't pay your price. If you think it is a good idea to arm your shopper with prices they will use against you in the market, I say, "go for it." But what do you do when you get a buyer with serious negative trade equity? You scrape up all of the customer cash and incentive money you can, but your bank call leaves you short of your stated price/margin. Lets say your stated no negotiation margin is $500 but your bank call only leaves you with $150. Do you let them walk to maintain your credibility and ideology? Or do you take the deal and make it up on the back end. OR do you bump the trade, another form of negotiation? These "plus deals" are the ones that drop straight to the bottom line.
 
In my opinion, there is a lot of "hair splitting" going on with this thread. I feel like there are a lot of different people saying about the same thing in a slightly different way.

This is some of what I see.


I'm going to say something that many will find hard to believe - Your buyer doesn't have to trust you.

Your goal doesn't have to be trust, but it should be credibility. Trust is like faith, "Faith is confidence or trust in a person or thing or a belief not based on proof". Credibility, on the other hand, can be gained thru two paths; Negotiation or Market-Based Proof. Neither relies on a need to disclose your profit structure.

I completely disagree. My buyer has to, and needs to trust me. Your definition of trust/faith states that it is not based upon proof, yet your method of building credibility is Market-Based Proof. They are one in the same, and necessary. FOR THE MOST PART, customers will not buy from me unless they trust me. Sure, if I have a giveaway type of order taker price on a vehicle the customer may not care. That is the rare exception, not the rule.

A new sales staffing model.
  1. Have a fun product specialist who carries the customer from the greeting through the test drive. The party person.
  2. Have a technology-capable person who is skilled at negotiation who will handle all the paperwork and any back & forth. The smooth negotiator who knows how to work a computer.
  3. Finish things off with a very thorough product specialist who can set the vehicle up, make sure it is properly cleaned, and then have the time to provide a strong delivery of the car and the service department. The delivery specialist.
On point #2 this person will now be able to speak to the strengths of the car along with setting things up for finance products and extended maintenance/warranty agreements. A lot of the time the sales agent talks the car up and then the F&I manager talks about how quickly it is going to break. This can put the customer at odds. And this one person can kill the odd feelings that occur on the transition from the test drive to "let's go inside."

On point #3 pay plans are currently not tuned to push a good delivery. People do okay deliveries because of CSI needs, but they're paid more on selling cars. Once the customer is contracted a sales agent wants to get another sale and the delivery a customer really needs can be shorted.

In theory, I like this idea. I worked in a store that did exactly this. It was great for the bottom line because the product specialists were hourly employees that just didn't want to work in a factory setting and wanted to put on nice clothes every day. We eliminated a lot of the showroom squabble because ultimately they were getting paid either way. They didn't care which customer belonged to which product specialist, they just wanted to be happy and help people.

This was not good for customer morale. We start with this guy, get handed over to someone else, go in with this other person, and then someone completely different handles this. What happened to that funny nice guy we started with? Is he still here? We want to talk to him. The transition from Party to Combat was perceived as even worse than the alternative.

NOW, I am not saying that this will not work. I am saying that if this process is fully embraced from the second a customer hits the lot, it can work. I believe that the product specialist needs to be completely honest with people and just tell them: "I really don't know how all of that works, my job is to make 100% sure that we have found the vehicle that will come the closest to doing every single thing you need it to do. When we are all satisfied that we have found that vehicle, Joe will help you with the price, trade in value, payments, and all that other stuff."



The idea that our jobs rest on our ability to negotiate is the single biggest factor that separates the 'old school' from the 'new school'. Negotiation is not a hallmark of great salesperson. Indeed, I would contend that the ability to justify your asking price takes more 'sales talent' then negotiating away some of the profit. It is time retire the idea that negotiation requires more talent and that selling for your asking price is something only 'clerks' do.


Personally, I believe that the level of talent required to sell for your asking price is directly related to the pricing structure that the individual store uses. If you are in a vAuto type of store that aggressively chases the turns, and the vehicle is a 50 day unit that is priced to just get rid of it......it is a clerk's job. If you are pricing your cars at 5% over Retail, you aren't going to get your asking price (generally speaking) and you better be good at negotiation. It all ties back to the gross profit that the individual store is trying to attain.

As dealership managers, how do we evaluate our sales people? Volume? CSI? Gross Profit generated? Payroll? F & I profit? Finance Penetration? All of the above? None? I don't know what the answer should be, but I know for me it is total gross profit generated. I like the salespeople that generate a lot of gross throughout the entire front end. Over the last 20 years, month in and month out, these people have been great negotiators. Split the hairs as many ways as you want, call it what you want, they were great at negotiation.

@Alex Snyder acknowledges this in his idea of transitioning to product specialists, negotiators, and delivery people. His system would in essence put every customer in front of the strongest negotiators in the store!

Anyway, lots of good information in this thread.

Oh, one more thing...I don't know how we can be more transparent. I can however share a link to a dealer's website that in my opinion is about as transparent as it gets. Look at their Shares Program and the vAuto powered Real Deal thing.

http://www.truworthauto.com/default.aspx