Many managers and sales reps attempt to move forward with a sale before taking time to build relationship equity that is needed to close the deal. They are “upside down” with the customer.
How does this happen? One common way is poor pre-qualification of customers. With prime customers, you would not consider walking on the lot and immediately giving a price or making a payment call.
Instead, you take the time for a walk-around and test drive to build the value of the vehicle. You build value before asking for information that elicits a commitment from the customer.
Let's look at how it's done with subprime customers.
In subprime, the sale is not made during the vehicle walk-around or the demo. Instead, it is made during the customer credit interview. It is here that we explain the approval and purchase process, setting or adjusting expectations.
The constraining factor in a subprime auto sale is the payment terms a lender approves for the customer. It is here we leverage the fact that “the bank has approved you for these vehicles.” Think of this as the “credit” walk-around.
The credit interview should almost always be done face to face at the dealership with a “credit manager.”
If you pre-qualify customers on the phone before bringing them in for an appointment, you cut short your ability to build value. If you require co-applicants, cash down and a list of stipulations to begin your relationship, you will start it with psychological negative equity.
Don't pre-qualify leads. Bring everyone in. When setting appointments with proactive sales leads, get on the phone, answer basic questions, make the appointment and get off the phone.
Consider these fundamentals of sales.
- People don't like to be sold, but they love to buy.
- People buy with emotion and justify with logic.
- People buy from people they like.
If people love to buy, it is important that we find out why they love to buy. Often in the car business we focus on “what” questions. What type of vehicle? What payment? What interest rate? What term?
These questions are fine but secondary. First focus on the “why” questions that explore buying motives tied to customer feelings and emotion. Put yourself in the shoes of a subprime customer. Three buying motives stand out: 1. Trust. 2. Personal care. 3. Need and desire for the vehicle.
Every prospect you face is asking themselves: “Can I trust this person?” Are you dealing with integrity? Or do you make unfactual statements that contradict other information you have provided?
Build trust by logically explaining the approval and purchase process. Testimonials from other customers can build trust. Whether written or told, share stories of other people you have helped. Stories connect with people emotionally.
Customers also ask themselves: “Does this person care about me?” People don't care how much you know until they know how much you care.
Take time to learn your customer's story and answer their questions. Share life challenges you've faced. Treat your customers with respect, even the difficult ones. You are the professional.
Need and desire for the vehicle
Serve your customer by dissuading them of unrealistic expectations for a vehicle that no lender will ever approve. Find out needs, control desires.
Credit-challenged customers need vehicles and also need to reestablish their credit. Once you have worked with the bank to determine the appropriate price point, build desire in the product with a proper walk-around and demo. Co-signers, cash down and stipulations come easier once you've made sure the customer really wants the vehicle.
To learn more, e-mail me for a copy of Best Practices to SUPERCHARGE your Subprime Sales & Profits.
Tim Shea is President of Great Direct Concepts, a subprime automotive consulting firm. He can be reached at [email protected] and 800-430 5484.