It’s no secret that the emergence of the digital age has leveled the playing field in the front end of the car business. Customers now have ready access to a plethora of information. To counter this, many dealerships have made savvy changes to their marketing strategies—transitioning to a one-price structure in the hopes that they will still make a respectable profit in the F&I department. Nothing wrong with that. We are all in business to make money.
However, most dealerships are still using a grossly outdated model. Their approach to the sale hasn’t changed in decades. This is a major bottleneck for many of the dealerships that I have observed over the years, places with salespeople still treat customers as if they don’t know anything about invoice pricing, trade values, interest rates, etc. How would you react if your salesperson ignored the hours of research that you performed prior to shopping for a new car? Especially if you knew in advance that a competing dealership was advertising the same vehicle for $1,000 less?
It’s important that we always view the buying process through our customer’s eyes.
The national average closing ratio for automotive sales professionals and dealerships continues to hover around 25%. Dealerships spend an awful lot of money to get people through the door, but 75% of those opportunities are being squandered. It doesn’t make sense to market like it’s 2016, but approach the sale like it’s still 1996. The status quo as it pertains to the approach to the sale is in desperate need of a makeover.
How do we fix this? And, what are the implications of doing so?
The Law of Reciprocity. Never heard of it? Google it. It basically states that when you do something nice for someone, they will feel a deep psychological urge to reciprocate by doing something nice in return. This is not meaningless idealism. It has been proven time and time again in social psychology and in business. In fact, some of the largest industries on earth have been capitalizing on this law for decades and it could completely revolutionize the car business. Simply provide every customer with a consistent, outstanding experience from first contact, all the way through the entire buying process. No more smoke and mirrors, no more high-pressure techniques, no more power closing. The positive by-products are many.
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Author: Digital Dealer
Digital Dealer exists to help dealers and their managers sell more vehicles more profitably by creating the best live events and media in the industry.