Customers, used to buying virtually everything on the internet, expect an Apple Store experience and no longer are willing to put up with the extended length of time it takes to buy an automobile.
Automakers and their dealers finally recognize this reality and the need to be more respectful of their customer’s time.
Based on Rikess Group research we found:
- 70% of all sales take at least three hours to complete, not including delivery.
- At best, customers actually are engaged, (meaning actively moving the process forward) for slightly over an hour. This means the rest of the process – 60 to 90 minutes – is wasted time for the customer.
- Sales consultant productivity is crippled by the elongated sales process, especially during peak times (weekends, end of the month, etc.). Due to so much wasted time, salespeople get at best only two opportunities a day to sell a car during peak hours.
- On average, customers are left alone or abandoned 11 times during the sales process.
- Sales managers often do not recognize the problem because they are not negatively impacted financially.
Here are the biggest time wasters and ways to eliminate them:
Issue: Financial Service representatives typically take 30-40 minutes to load, print and have customers sign delivery documents. The backup in F&I has nothing to do with the sales process, but is due to expensive F&I producers conducting low-cost clerical activities.
Remedy: Hire $10 to $12 an hour document processors to work during peak business hours. I’d recommend hiring seniors in college who easily can work evenings, weekends and possibly could join the sales force upon graduation.
Issue: Multiple desk trips. In most stores, salespeople abandon the customer to get deals “desked” by management at least two or three times. This tired part of the sales process wastes about 30 minutes per transaction.
Remedy: Eliminate or limit negotiations to a “one-pencil” sales process. If you employ a limited negotiations model, determine how much you’ll negotiate (typically $200). Use a third party pricing resource to validate the price and empower salespeople to negotiate on their own.
Issue: Finding cars and keys. For inventories of 300 or more cars, personnel average about 15 minutes per transaction locating keys and cars.
Remedy: Use a system that drops a pin on a Google map of your stock. A more expensive but also effective method is hiring additional lot attendants for peak business hours.
Issue: More customers than sales consultants. All dealerships have peak sales times when customers outnumber consultants. That’s because stores use a “coverage model” for staffing with sales consultants reporting for work in shifts. Because of this, customers often wait.
Remedy: Use demand scheduling instead. Schedule staffing based on customer-traffic flow with more sales consultants on the job when customer traffic is at its highest levels. Another remedy: hire part-timers to work peak times.
Issue: Trade appraisal. During peak business hours, there are more trades to appraise than appraisers available, easily wasting 10 to 15 minutes per transaction.
Remedy: Coordinate the trade appraisals so they’re done while the salesperson and guest are on a test drive.
Eliminating wasted time in the sales process is something that virtually every dealership can do. Be open-minded to tweaking or enhancing specific aspects of the sales process. Your customers and staff, will thank you.
Former dealer Mark Rikess is founder of The Rikess Group, a consulting and training firm. He is one of the original advocates of 1-price selling.