Every day you walk into your dealership you are thinking let’s sell some cars! But, are you using the hope strategy? Let’s hope we do well today. I hope we sell more today than yesterday. Let’s hope we have a good week and maybe even a good month. Let’s hope the new sales people we just hired are going to be great. Hope is NOT a plan or strategy.
Do you think great operators of great dealerships think this way? Or, do they have a proven plan. A great strategy to sell more cars each month. To grow business profitably. We both know they always do.
So, let’s discuss one way to improve sales this month and every month. Leasing. Leasing New vehicles. But it’s not that easy is it. Nothing in this business comes easy. What is your lease penetration for your store? Do you know exactly what it is? Do you know what it is by model? In your store is leasing an afterthought? The customer asks the salesperson. “Is there a good lease on this car?” Or your desking a deal and the customer is dead set on a payment and you can’t get there even with 84-month finance. So, you go out and try to close them on a lease payment. Wrong again.
Have you ever heard “it’s the payment stupid”? So why are you trying to sell vehicles every day using higher finance monthly payments? Let me ask you this question. How many cars could you sell today if you could announce at 9 a.m. to your sales staff “all new cars are half price today?” But no, we try to force long-term payments of five, six or seven years on our customers.
And here is the real question. What happens when your best salesperson takes a customer, gives a great presentation, an awesome walk around lands them on the perfect car, and they take them on a test drive? They come back and work the deal with the desk. The customer gets the numbers with buy payments of course. No mention of the great lease payments. The customer is very appreciative says they are just not ready to buy today. And out the door they go. Sales tells the desk “Don’t worry they will be back no doubt! They loved me.”
Maybe not. You are assuming the customer does not drive 10 miles away to the next dealership. Maybe even another Make. The customer goes in and meets another great salesperson, EXCEPT this store has a strong lease strategy. They have cars on the showroom with lease payments on each car, which are clearly marked with all the details. All the information is very transparent and easy to understand. The salesperson makes a strong easy to understand presentation on why leasing is a great way to buy their new car. And boom the payments are substantially lower than the previous dealers buy payments. So, the customer ends up driving away in a new vehicle. That by the way is equipped with options they thought were out of their payment range. Yes, it’s the payment, isn’t it?
Leasing vehicles takes a strong process. It is consistent marketing messages…on your website, and in any advertising you do. It is training your entire sales staff with professional leasing. Many captives offer it. And there are great third-party companies who do as well. And the training as with any great process is always ongoing. I like to compare it to sports. I like baseball so I always use the pitcher. Great pitchers have a strong repeatable process. And do you think they practice that process? Train? Yes, every day or else they would not be playing very long.
Your managers must be included. If they are not on board your process will break down quickly. You must desk every deal with both lease and finance payments. Every close you must present both. No exceptions. None!
Once you have this plan in place you must then plan for the most important part: Retention. Leasing vehicles is about keeping them loyal to you and the brand. And that means building a rock-solid retention process. Because once you do every customer who has leased a vehicle from you must make a buying decision and you must be there to help with that decision. Contacting the customer six months prior to lease end. Reaching them before they begin to search for a new vehicle is key.
What are the additional benefits for your store? Excellent source of Pre-owned inventory. And with that additional Service and Parts business. All good things.
So, I ask again? Are you hoping to sell more vehicles this month or do you have a plan?
Don’t miss Joel Dalbo’s session: “Volume Through Leasing” at the 22nd Digital Dealer Conference & Expo this April 11-13th in Tampa, FL. You’ll learn how to overcome the 3 main customer objections to leasing a new car, and desk deals using leasing vs. finance payments for the A B close.
Author: Joel Dalbo
Joel Dalbo, Academy Instructor at NADA, brings more than 30 years of experience to help you discover why you should be leasing more new cars to increase volume. He was a Zone Manager for Volvo Finance N.A. and was responsible for developing and delivering extraordinary lease programs for Volvo dealers US. He was also Director of Car Sales for Hertz Car Sales Western U.S. and General Manager of several Southern California Automobile Dealerships. He is currently an Academy Instructor with NADA in Tysons VA where he teaches financial management.