Tag Archive | "sales strategy"

F&I Meets Generation Y


Those of us who do dealer development and work with F&I managers are hearing more and more questions about a somewhat frustrating and confusing group of buyers that is usually referred to as “Generation Y.”

Who are Generation Y buyers?

The term usually refers to those young people born between 1980 and 1994; in other words, between 20 and 30 years old.

Why are they different?

Gen Yers may sometimes seem unfocused, but they are not stupid — not by a long shot. They’re the best-educated generation in American history. They are knowledgeable and intellectual. But they make their own rules, and they like to do business in a different way than older generations.

It’s easy for members of older generations — and if you’re over 30, you are now “older” — to view this group as impatient, casual, flippant and, often, disrespectful. They seem to older folks to lack social skills. You hear cliché stories about members of this group who attend seven years of college to get a four-year degree and then move back into Mom and Dad’s basement.

So why worry about them? They can’t buy anything anyway.

We need to focus on those who are responsible and gainfully employed, because they will be buying cars for the next several years.

And there will be a lot of them. Gen Yers are now the largest generation in the United States, numbering about 85 million, their annual spending power is approaching $1.5 trillion. They are the next generation of adults.

How do we help our F&I professionals deal with them?

I have gleaned a little firsthand knowledge about this generation. Over the past decade, I have worked closely with some of its best and brightest members. Every year, we hire a group of interns to help with various projects. These are second- and third-year MBA candidates. These “kids” are sharp, and they have provided us with a lot of insight into their thinking during the development of our current Package Option process.

But they are still just kids in many ways. For example, one of the brightest young ladies we have ever had as an intern is at work in our offices now. She’s only 22 years old and she’s already being recruited by several major companies. During a recent scheduling meeting, she asked, quite sincerely, “Isn’t the Fourth of July supposed to be on a Monday?”

While we will be learning a lot more about this group in the future, there are a few simple principles we have found that can help make working with Gen Yers a lot easier and more successful.

1. Make the F&I process easy, simple, and fast.

One of the things that has made our Package Option method especially effective with this group is that it allows them to buy everything easily and quickly. Gen Yers are in a hurry. They have little patience for longwinded presentations. They believe that every transaction should be as quick and painless as picking a combo meal at McDonald’s. They don’t know whether a No. 1 costs less than ordering the contents individually. They don’t care. It is simply a function of expediency.

2. Respect them.

Gen Y was raised on self-esteem and told that each one of them is special and unique. … And they believe it. Let them know that you respect them. Don’t talk down to them. And don’t get put off if they appear too casual and unconcerned. They might be answering text messages throughout your presentation. Don’t be offended. They aren’t trying to be disrespectful. In their world, it’s perfectly respectful to text your friends, even while they’re on a date.

Always remember that if you seem negative about their behavior, they will react negatively. One F&I professional told me, “It sounds like we should just treat them like everybody else.” That’s true, but with even more tolerance and patience.

3. Be honest and be yourself.

Don’t try to act any younger or hipper than you actually are. You will lose all credibility with this group. Be up front with them and let them know their options. Don’t try to hide or disguise information; instead, divulge and disclose everything. Let them choose.

4. Be careful with technological devices.

Generation Y probably knows more about your computer and iPad than you do. In our recent field testing of various on-screen and mobile presentation devices, we noticed that it was very easy for the Gen Y subjects to focus on the gadgetry and end up missing the product message. Make sure that any technology you use is simple, to the point, and operated only by you.

5. Inform them, don’t “sell.”

Generation Y doesn’t have much experience with making decisions. They respond to information rather than sales pitches. Explain to them, in as simple and direct a way as possible, what your products are and, more importantly, what advantage they offer them.

6. Don’t be afraid to involve Mom and Dad.

Members of Gen Y, even the adult ones, consult their parents for advice on purchases — especially such “adult” purchases as automobiles and F&I products. Be prepared for a parent to become involved. Welcome their participation and assure them your products are in their child’s best interest.

7. Focus on them, not you.

Members of Generation Y are interested in hearing about what matters to them. “Why is this important to me right now?” and “What can this product do for me?” matter much more to them than older folks’ learned opinions.

There will be many more F&I strategies emerging to deal with this group as they make their presence felt in the marketplace. And adapting our dealers’ processes to Generation Y will be an integral part of our research and process development functions over the next several years.

That’s simply because we recognize that one of the keys to F&I success in the next decade will be honing the F&I process to match the expectations of this huge, emerging group of buyers.

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Diagnosing Your Clients’ Needs


When people think about making a vehicle purchase, they aren’t likely to compare talking with you to going to the doctor, but you should make that comparison when preparing to talk with clients. People trust doctors. They usually accept the diagnosis and prescription for wellness with few questions asked. That’s because they recognize doctors as experts in their fields. Your goal is to have your clients see you the same way. When they have an ache or pain related to their mode of transportation, they should immediately think of calling you. That’s because they’ll be confident you have the right prescription for their ills.

To earn this level of respect and trust, you need to start every relationship with the right skills. These skills include a caring manner, a confident air, and your diagnostic tools. The tools you use in diagnosing the automotive needs of your clients may be as simple as a pad of paper and your product knowledge. They may include your past client experiences, personal experiences or memories.

The most powerful diagnostic tools used by all people in sales are questions. Like a doctor, your use of questions begins with general areas of need. Then, based on the answers you are given, you narrow your questions down to where you can readily determine the right cure or solution for the clients’ needs.

Average car salespeople have this fantasy in which they think they should be able to simply present the wonderful features of their vehicles and the customer, seeing the value, pulls out their checkbook or credit card and says, “I’ll take it.” If customers made buying decisions based on features alone that might work, but it’s a rare occasion when it does.

The reality of it is that most buying decisions are based on past experiences, the experiences of others the client trusts, advertising, gut feelings and hundreds of other factors that you can’t do much about. So, you have to start with questions to find out what they’re thinking. Get them talking about their needs, wants and perceptions of your product or service. The answers will help you put yourself in their shoes. Once you’re there, you’ll see what steps you need to take in order to help them take to make a sound buying decision.

Be sure to ask “what past experience do you have with this type of vehicle?” It could be that they’re very well-versed on the features of an SUV or luxury sedan, even used it in the past, and are seeking a new one of the same type. If they know little or nothing about the vehicle they’ve come to see, you’ll have to invest a bit more time in educating them as to the features and what they can expect.

Ask very specifically what they hope to accomplish with an investment in this particular type of vehicle. It could be that one of your vehicle’s key benefits is sought after by most clients. However, that feature does nothing for this particular client. You won’t want to turn them off by talking about something that doesn’t matter to them.

I like to use the analogy of a torpedo when talking about this subject. A torpedo leaves a ship in the general direction of its intended target. It bounces a signal off in the target direction. If the signal doesn’t come back, it corrects its direction to get back on course, and sends another signal seeking feedback.

That’s what questioning does for you. You take off in a certain direction with your questions. The answers you receive either tell you that you’re on target or that you need to take another tack. Rarely will you take a direct course from initial contact to the vehicle sale. More often than not, you’ll find yourself zig-zagging but all the while heading in the general direction of the sale until you find just the right answer for each and every client.

Take a moment to think about the quality of the questions you are asking. How quickly and accurately are they bringing you back the information you need to move forward with a sale? If you continually get hung up in one aspect of your presentation, invest some non-client time writing out the questions you’re using now. Then, think about how you could rephrase them to get better feedback. An even better strategy is to make a list of all the information you need to have before asking for a decision. Then, work backwards, writing out the questions that will provide those answers. Either way, you’ll soon find yourself with better questions to ask, and a shorter, more efficient sales process.

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100 Percent Turnover (Here’s How To Get It)


One of the things an agent can do for a dealership is to handle politically sensitive issues between the sales department and the F&I managers.

One of those areas of F&I development where the agent can be very helpful to the F&I manager is by helping institute policies that make sure every customer is being turned to F&I at the time of the sale. This problem most commonly occurs when the sales department sells a car to someone, writes up the purchase order, and arranges for the customer to pick up the vehicle at some future date without seeing the F&I manager.

Then, the customer shows up a few days later with a bank or credit union check in their hands to pick up the rig. Many times in this situation the dealer could have gotten the financing on the deal if F&I had seen the customer. But they didn’t get the chance.

This practice is a real cause of frustration for the F&I manager and a cause of friction between the sales department and F&I. The F&I managers complain to management but tend to get nowhere in dealing with this problem.

Since this practice can be very damaging to the dealer’s performance numbers, it is an opportunity for you to immediately increase the dealer’s income if you can get control of it. But how is this done?

There is a solution, but the trick is for you to get it implemented.

This is a policy issue that needs to be controlled by the General Manager or Dealer Principal. They need to make referring 100 percent of the customers, at the time of the sale, a firm policy. However, you may need to make a compelling case to them as to why they should bother. You need to motivate them to take firm action.

You need to be smart. Here are some facts:

  • No lender will give a loan without a purchase order. None of them.
  • It is very important that the purchase order is correct, compliant, and approved by management, right?
  • The purchase order should be printed and professional looking, obviously.
  • And who’s the most qualified to assure all of the above? Of course, F&I.

Therefore, it makes perfect sense for the GM or Dealer to set a policy that EVERY purchase order will be generated in the F&I office before it leaves the dealership.

“But wait,” you say, “I can’t get the GM or dealer to do that. They just let Sales run things the way they want to!”

So, you have to give them a reason to implement this policy. Here’s what you do:

For the next month, have the F&I managers keep a log of every customer that isn’t turned to them at the time of the sale. Then, at the end of the month, generate a report for the GM or Dealer Principal. In this report you want to show them the number of people that were not referred to F&I and then multiply that number by their average dollars per finance deal, (not per retail).

The resulting figure is the potential lost income from those deals, if the F&I department had seen them and been able to get the financing.

Here’s a recent example from an actual dealership:

Retail Units Delivered: 96
Customers Not Turned at Time of Sale: 26
Average Income Per Financed Deal: $966.30
Potential Income from those deals if financed: 26 X $966.30 = $25,123.80

This dealership lost the opportunity to make an additional $25,123.80, simply because they didn’t give the F&I department the chance to get the financing. It’s simple math.

If you take the time to keep track of those customers that aren’t turned and do this report, you will get management’s attention. Now, they may not react immediately. Be patient. This will work.

If it doesn’t change after the first month’s report, do this calculation again for the next month (and the month after if you have too). Sooner or later, the dollar amount you are revealing will have an effect. (In the example above, the second month’s report is what got the policy implemented).

The effect of approaching the problem this way is that you are showing, first, that there is a good dollar reason for 100 percent T.O. at the time of the sale. Secondly, you are showing the dealer that you are staying on top of what is going on in their F&I department.

Do not show any emotion or debate this with anyone. It is not about how anyone feels about it or anyone’s opinion. All of that can trip you up. It is simply about net profit. Just calmly show them the numbers. Don’t sell, just report.

I once had a GM say to me after reviewing this report, “Yeah, but we don’t know how many of those people would have financed.” And I said, “You’re right, and we never will. All we know for sure is that we lost whatever potential income was there and we’ll never get it back.”

It drives them nuts, believe me. They will do something about it, sooner or later.

Every Dealer and General Manager is unique and different, but every one of them I’ve ever met wants to make more money.

By the way, when you get that accomplished, you will be the hero of the F&I managers, as well. Try it. It works.

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How Important are the First Impressions Customers Have of Your Dealership?


You can’t afford to miss even one sale these days, and we all know first impressions make or break sales. So let’s talk about some of the first impressions your prospects have of your dealership. You work there, so you may not see what they see anymore. Have an out of body experience – walk through and look at things through their eyes…

The first impressions your customers have of your dealership…

  • Will their first impression from your advertising be about how cheap you are or will they see why they should buy from your dealership (value)?
  • When they’re about to pull onto your lot, as they glance at your dealership for the first time, what do they see: a nice clean well-lit place, or something else?
  • When they first see your sales force as a group – do they see professionals or do they see a bunch of car salesmen in the huddle, just waiting to pounce?
  • As your salesperson approaches them, by their appearance, does the prospect see a professional or a …???
  • Is each salesperson’s approach timely and positive with a smile, or do customers see a salesperson with coffee in one hand, sunglasses, bad wardrobe and a prank tie from the kids at Christmas?
  • When they first see your inventory, is it a value building experience or do they see a messy lot, dirty cars, dead balloons and price signs everywhere?
  • When they drive a vehicle, is it clean, gassed and ready, or the opposite?
  • When they walk through service, will they see a clean shop and meet nice people or just the opposite?
  • When your salespeople try to close the sale, do customers hear a car salesman or a professional in sales?
  • The first time they walk into your showroom; is it clean and professional or has it gotten tired and messy?
  • When they see the salesperson’s office, is it clean and professional or does it look like a closing booth?
  • As the salesperson starts the paperwork, are they trained and confident or clueless and clumsy?
  • Is the first offer from the desk just some scribbled stuff that’s barely legible or is it clear and spelled out?
  • First offer: is it the old school ridiculous ‘hit ‘em high and peel them off the ceiling’ stuff or just the next step in your professional sales process?
  • When they first meet a manager on a T.O., will they see a professional or think, “Are you kidding, is that guy in charge?”
  • What will they hear from management? Will it be professional or just more fast talk and price closing?
  • Transition to F&I: will there be a professional transition or a salesperson yelling, “Hey Larry, are you ready for my deal?”
  • F&I: will they meet a caring, helpful professional or another amateur?
  • Salesperson delivery: will it be professional and effective or “Hurry up and leave so I can get another person up?”
  • Their first contact after delivery: will it be professional and timely, none at all or more amateurish car stuff?
  • First service contact: will it be professional, prearranged and effective or will it feel rushed and ‘who’s next?’

If the first six are negative, won’t those influence how they see the other fifteen?

I hope you realize, the customers’ first impressions will make or break sales in every department, every day.

Remember: You never get a second chance to make a great first impression!

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Addressing Client Concerns


How you address client concerns will have a powerful impact on your overall success level. In many cases, once concerns are addressed, the sale is made. You can go straight to asking for their approval on your paperwork.

The foundation of addressing client concerns is a simple, yet incredibly powerful six-step process that I’ve taught for many years. Read through them here. Then commit to re-reading them at least twice a day for a week.

Step #1: Hear Them Out

Let the client talk until you know as much as they do about their concern. If you try to address the concern before hearing all of what they have to say, you may end up answering a concern they don’t feel is all that important and/or bring up another concern they hadn’t even thought of.

You see, raising concerns is a defense mechanism. Buyers react to the urge to go ahead by slowing things down with a concern. So, let them get it all out before attempting to address any point they’ve raised.

If you feel they’re not telling you everything, encourage them to talk with phrases such as, “I see. Is there anything else that concerns you about this decision?” or “What concerns do you have about…” You want to know all the bad past experiences they’ve had, all their reasons for hesitation before you move on. If you don’t, you may find yourself back at this point again with this client.

Step #2: Feed it Back

Simply re-state their concern in your own words. “So your concern, John, is…” This accomplishes two things. First, you demonstrate that you really listened to the client. Second, you have the opportunity to get confirmation from them that you understand their concern. Having someone understand you makes you feel closer to him or her. It creates a bond or common ground of sorts. It warms them up to accepting your advice on the purchase.

Step #3: Question the Importance of the Concern

This step can be tricky if not handled properly. You must gently ask if this concern would keep them from making the decision to go ahead if it cannot be resolved. It could be this concern is not all that important and the client will dismiss it when they consider whether or not it would keep them from owning the vehicle. If it would stop the sale, you then proceed accordingly.

Step #4: Answer the Concern

Depending on the concern, you may be able to do this quickly or you may have to do a little research on behalf of the client. Either way, you need to demonstrate, above all else, a sincere desire to help them. You’re working for them at this point. You’re an industry expert and a research consultant at their disposal. This could also be a good time to ensure them that you wouldn’t want them to make a decision without having all the facts, or a decision that might not be exactly right for them.

In answering the concern, you must consider it like a close. You have to appeal to their logic, yet close them emotionally. You’re helping them to rationalize the importance of the concern and the value of your answer.

Step #5: Confirm the Answer

Once you see signs that they’re agreeable to your answer and that it makes sense to them, make a simple statement of that fact. You could say, “That makes sense, doesn’t it?” If they agree, the concern is now behind you. If they show any hesitation at all, you must go back to Step #4 and come up with a better answer.

If you feel there’s more they haven’t told you, warmly ask, “Obviously, there’s a reason for your continued hesitation. Would you mind sharing it with me?” It could be they’ve just come up with another concern and are uncomfortable telling you since they already told you above that it was their real final concern. Always, always give your potential clients opportunities to save face if you see that they’re feeling hesitant or uncomfortable in any way.

Step #6: Change Gears

Once the concern has been satisfactorily addressed, it’s time to move on. The simplest method I’ve ever used to move on to the next aspect of the sale is the phrase, “By the way…” Then, I move onto the next area of discussion, changing gears so-to-speak to move on to the close or the next decision that must be made before closing.

P.D.R. (Practice, Drill and Rehearse) these steps until they become natural to you. Try them with your spouse or children the next time a concern is raised. When you feel comfortable with the strategy, start applying it. You’ll be amazed at how much more effective you become at handling concerns.

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How Many Managers Really Do a Good Job?


Based on the 80/20 rule, 20 percent of managers are great and the other 80 percent are either average or below-average. What’s the difference? The great ones learn how to deliver extra sales each month to help their salespeople and their dealership grow and become more successful, year after year.

Before you can define a successful sales manager, first we need to define success in sales management.

I don’t refer to a successful sales manager as someone who had a great first year at the dealership. It’s easy to have a big bang when you start, just by taking out some of the garbage. I also don’t define ‘good’ as someone who can clearly explain why sales are down. Anybody can make a list – the good ones fix the problems on the list.

When I talk about a successful manager, I’m referring to someone who makes a significant and measurable increase in sales, gross, CSI, CS and customer retention year after year, not just the year they were hired or promoted.

A successful manager has stopped turnover in sales and is constantly improving the quality of the selling process for the dealership, the customer and the salespeople.

Successful sales managers do their absolute best to win the game today, this month, this year. They continually set goals and write plans to win again, and they produce and hold themselves accountable for results.

It’s just a fact: most managers fail at consistent success. It’s also a fact that most sales managers were never trained on how to hire, train or manage their people. We learned to appraise trades, order cars, desk deals, write ads, handle heat and work deals from watching someone else – but serious training on managing people? Nope!

What Are the Qualities of a Successful Sales Manager?

A successful sales manager…

  • has clear, written policies and procedures of exactly what they expect from their sales team.
  • hires only good people or people they will commit to make good.
  • initially trains all new hires on the procedures, the skills and the work habits required to succeed in sales.
  • measures (tracks) every opportunity, activity and result, so they’ll know exactly what training and coaching each person needs to improve and grow.
  • provides continuing education every day to every salesperson, so they can continue to grow in sales.
  • motivates each person through training, praise and money, and by removing the demotivating events that negatively affect the team.
  • sets clear goals for the team and each individual, based on effective projections; writes clear plans and follows through with the exact training and one-on-one coaching to make sure each person hits their goal.
  • leads the team to more success, month after month, year after year.
  • never blames the team and always looks at how he/she can improve themselves to make the team better.
  • holds everyone accountable and never keeps a player who’s bad for the team.

The successful sales manager also…

  • is aware of everything happening in sales, with each salesperson and about each prospect and customer.
  • has confidence in their people because of the effective training, management and coaching they’ve given each person.
  • is a possibility thinker and develops a plan to overcome and improve in any market condition or any situation.
  • understands ‘sales management’ is two words and continually learns all they can about “selling” and “management” and works on continually improving themselves first.
  • understands how valuable each person on the selling team really is, and understands a significant improvement from even one salesperson can generate more net profit per year than doubling the advertising budget next quarter.
  • understands the 80/20 rule applies not only to the competition, but to their sales team, too, and knows that without supervision, what they see now, is all they’ll get, or less.
  • understands that monthly sales production and annual growth are the responsibilities of management, not of the market or of their salespeople.
  • manages each individual on the sales force daily to guide every person on the team to more success.

The success of your dealership, both short- and long-term, is up to good management – not up to a good market.

Help your salespeople sell more cars with Joe Verde’s new book, “Earn Over $100,000 Selling Cars – Every Year.” Go to www.joeverde.com to get a free PDF or order a free soft-cover book.

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