PSB 123s: Increasing new unit sales profit
1. Have a sales process in place that works and that the staff trusts.
“How well does your staff follow your process when you are not looking? Do your customers understand, accept and respect your process?” Tom Orlando of The Dealer Team said. “If you never hear an occasional, random complaint about your sales process, you are not aggressive enough, and if you hear regular complaints, it’s not a well-run process.”
2. Work the finance.
“The time to look for a finance source is now when the snow is on the ground, not when the floor gets hot,” advised ADP Lightspeed’s Hal Ethington. “Introduce yourself — you, the owner, introduce yourself — to every credit union/bank decision maker/paper-handler you can find.”
3. Assume everyone is financing their purchases through you.
“Focus on an affordable payment not price,” recommends Bill Nash of RideNow Powersports. “Most people aren’t pulling the cash out of their checking or savings.”
4. Be willing to walk away from the deal.
“If you can’t say no, you’ve already lost all your negotiating power,” explained sales trainer Don Cooper, The Sales Heretic. “Understand that price is more important in the mind of the seller than the mind of the buyer, however, savvy buyers know they can usually get a discount if they can play on the salesperson’s fear of losing the deal.”
5. Never discuss price before building value.
“Price and value sit on opposite ends of a scale, like the liberty scale,” Orlando explained. “If value is too light, price is way too heavy. If you build enough weight in the value side, price becomes very light. Until you have built up value, the product will almost always appear overpriced.”
6. Pay for what you want out of your sales force.
“Have a dog that’s been sitting there for a year? Talk it up, and put a monster spiff on it to move it,” Ethington said. “You have already lost your money on it, so don’t prolong the agony. It’s not going to move unless you make it move. You want margin? Then tie the pay plan to it.”
7. Throw in accessories — charged out at retail — versus discounting a unit.
“If you discount $500, it’s gone,” Nash said. “However if you throw in $500 in accessories, the store makes $150-$200 in profit on GP of the accessories, and it trains your staff not to discount price.”
8. Show staff that the price you are charging is fair.
“Know your local market, and price accordingly,” Orlando recommended. “If you are hitting on all cylinders, you should be at the top of the price curve in your area. Educate your staff on pricing issues, concerns and facts.”
9. Always mention extended warranties and service contracts.
“Both are high-profit items that can significantly improve the total profit of every deal, yet too many salespeople don’t mention them. And many salespeople who do talk about them do so unenthusiastically,” Cooper said.
10. Develop a strong back end.
“Set the space aside; get them off the sales floor; make it comfy, and make it nice. Offer [customers] a cookie and a drink. The truth is, they really do want that service contract, or that Gap insurance. They just don’t know it yet,” Ethington said. “Find the right person to do this, and you both will make good money.”