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What Do Customers Know?

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Shoppers might not spot the finer points of good salesmanship.

Ask car shoppers how a dealership salesperson should act, and they’ll tell you this and that. Trouble is, they might not really know what makes for good salesmanship.

Henry Ford said if he had asked his original customers what they wanted, they would have requested a faster horse. “The same could be said of asking people about their car-buying experience,” says Fran O’Hagan, CEO of Pied Piper Management.

His consultancy recently completed its seventh-annual prospect-satisfaction index. It uses mystery shopping to rank by brand how effectively dealerships handle customers and convert shoppers into buyers.

Pied Piper has learned a lot about dealerships in seven years. It also has discovered it needed to adjust its approach to better tie mystery-shopping measurements to actual sales success.

Smart salespeople build rapport and ask fact-finding questions to understand customer needs. But real customers are focused less on the sales process and more on other things.

“We learned people are thinking about what color car to buy, if they should lease or buy, what they’ll get on a trade-in, what option package to get and if this is the right dealership,” O’Hagan says.

“They aren’t thinking about whether the salesperson smiled or if the restrooms were clean,” he says. Yet, mystery shoppers often score high for friendliness and cleanliness.

Although real customers are vague in their ability to gauge salesperson performance, they are precise when measuring time spent (or wasted) at a dealership.

“If a salesperson says it will take 20 minutes to finish up, and you are still there two hours later, you will be very aware of that and tell me all about it,” O’Hagan tells me.

Several auto makers lately have prodded their dealers to upgrade facilities. That’s prompted some dealers to wonder whether constructing new and elaborate stores actually sells more cars. Facilities can make a difference, but perhaps not in the way auto makers think, O’Hagan says.

“It is not that the facility is unimportant,” he says. “But if a person already is at the dealership and it has the right vehicle in stock and the salesperson is brilliant, then the sale has almost nothing to do with the facility. A nice-looking dealership has more to do with keeping good employees.”

Pied Piper has toned done some parts of its evaluation and expanded others. It no longer poses some questions it once asked.

Among specific questions it asks of its mystery shoppers is this one: “Was the first thing the salesperson said was: ‘May I help you?’” If the answer is “yes,” the dealership loses points.

“We know that is the wrong thing to say because half the time the customer response is, ‘I’m just looking,’” O’Hagan says.

Good salespeople avoid that trap by instead striking up a conversation. They say something like: “I saw you pull up in a ‘dualie’ pickup truck. Does that mean you tow a lot?” That gets the selling started.

Mercedes-Benz, Infiniti, Lexus, Audi and GMC respectively occupy the top five spots of Pied Piper’s 2013 dealership performance index. Scoring low are Chrysler, Mazda and Mitsubishi. Scion is in the cellar.

Dealers in the top quarter sell 16% more vehicles than dealerships in the bottom quarter, O’Hagan says.       

Jaguar, Volvo and Audi salespeople were more likely to discuss vehicle features unique from the competition. Infiniti, Land Rover and Smart salespeople scored high for more often doing walk-around demonstrations.

Kia, Fiat and Hyundai salespeople were most apt to cite compelling buy-now reasons.

Mercedes capturing the top spot is no coincidence. The win reflects a concerted Mercedes-Benz USA effort of the last few years for its dealerships to sell more effectively and follow a defined process, O’Hagan says.

“In 2007, visiting a Mercedes dealership was like visiting a museum,” he says. “Salespeople were friendly and answered questions but they did not take the next step of actually selling the car. They stopped short of saying, ‘I know you want to buy a car, and I want to work with you on figuring out how to make that happen.’”

Discuss this Blog Entry 2

on Aug 7, 2013

Good stuff here. But what seems to be missing is the fact that our industry turns over its sales staff 3 - 4 times each year. There is no possible way for a dealership to come close to maximizing repeat business under that circumstance. All the high tech processes and CRM can't make up for it. Forcing a consumer to find a new sales person is entirely self defeating. When the consumer has a sales person at a particular dealership all factors are off the chart in favor of doing business as compared to when there is no previous relationship. Most dealerships turn over service writers almost as fast as sales people, another area of missed opportunity. At some point our industry will have to have an honest discussion about the elephant in the room everyone wants to ignore.

When a new salesperson starts probing before a relationship is established, many consumers are offended. The same questions coming from someone the consumer has an ongoing relationship with aren't at all threatening or offensive to consumers.

At the typical MB dealership, there is MUCH less turnover than at the typical volume import or domestic. For one thing, these guys can actually make a living? The moral to the story is that gross profit drives everything. Not only can the dealership stay open and thrive, but employee stability is enhanced which builds on itself. Let's make some money so we can offer the consumer the purchase experience they say they want, which can only be provided consistently by professionals with whom they already have a relationship with.

on Mar 13, 2014

wow !!! Being have worked in a car company and still working in the field or automobiles i was taught one primary rule which is applicable to any business or field. that is customer is king and his or her satisfaction is what matters for the company and the product to progress.thanks for this wonderful article. kudos.

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Steve Finlay

Steve Finlay is the editor of WardsAuto Dealer Business magazine and a senior editor for WardsAuto.com. His journalism career started 42 years ago as a crime reporter. A Michigan native, he likes...

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Jim Ziegler, president of Ziegler Supersystems, is a trainer, commentator and public speaker on dealership issues.
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