It was summer on the lot and hot winds blew between rows of shiny new vehicles.
Despite a gleaming new facility and a much-needed inventory boost, monthly sales lagged badly.
Discontent among the dealership’s employees was palpable and revolt (in the form of a mass exodus) was imminent.
Confronted with that, management decided to hire an outside firm to oversee a promotional sale event. As a prelude, “match and win” prize certificates were mailed to thousands of prospects.
Sales people for two weeks were pumped full of optimism about the upcoming event. We were told that as a result of the direct mailings, the lot would be swarming with customers ready to buy.
The outside firm’s preparations for the sale certainly seemed to presage success. A tent was erected where free food would be distributed, banners were hung and balloons inflated. The outside consultant had done all the marketing and would orchestrate the event from the showroom.
The consultant delivered a brief pep talk, reminding us how easy it is to sell cars.
“Just put them in the right car,” he said. “You have all this inventory, just identify the customers’ needs and match it to the perfect car for them, and it’s as good as delivered.”
Certainly this is good advice. But as we soon learned, it was not quite the magical revelation that this Rolex-wearing sage claimed it to be. Yet it succeeded in pumping us up. On Saturday morning we eagerly were ready to shoot fish in a barrel.
True to his words, our consultant had filled the lot with people. Unfortunately none of them seemed to be buyers.
A look at the “match-and-win” certificate-invitation revealed the problem. It promised kids games, hot dogs and a guaranteed cash prize of "up to $5,000." As customers came in, they were ushered to a table where the consultant examined their flier to see how much they had "won."
Everyone won only the minimum prize, $5. Our consultant would then give them a crisp $5 note and hand them off to a member of the dealership sales force.
So, we were presented with leads who were either angry about coming down to the dealership on a pretense or mildly thrilled about increasing their net worth by $5 (and not really in a financial position to swing a new SUV).
By the end of the weekend, our dreams of selling five or more cars each were gone with the wind. It was clear that the promotion had been engineered only to get people in the door, regardless of their buying intentions.
We trudged to the post-sale “debriefing” where our assistant sales manager ominously told us: “You guys had better think up some excuses for why this thing didn’t work, because when the owner asks the consultant that question the answer is going to be that you guys dropped the ball.”
The consultant didn’t have much to say to us. His attitude indeed seemed to be that he had brought in leads, and we had failed to convert them into sales. Yet anyone who had been on the floor that weekend could see the sales event was flawed, not us. Luckily, the owner seemed to get this.
To add insult to injury, the failed sale and its hoopla made transacting regular dealership business and customer interaction that much more difficult.
Despite the event’s inability to create real buyers, it did drive traffic to the dealership and create employee enthusiasm, however short-lived. Had it delivered on its sales promises it would have been a smashing success.
As it was, the desperation felt by the sales staff was exceeded only by that of our general manager, who was in the unenviable position of having spent several thousands of dollars on a sale that didn’t sell any cars.
Done right, a promotional sale can energize your store during a slow period. But if care is not taken in planning the event, it can turn into an expensive nightmare.
Here are tips for success:
- Hire the right promoter. The most important part of the sale is the company or consultant who runs it for you. Most of these companies have a website with a toll-free telephone number. While it may be tempting to go for the one with the slickest site and biggest boasts, it is better to rely on first-hand information in selecting a promoter. Ask friends or old associates at other dealerships if they have had an outsider-run sale recently, and what their experiences were. Avoid do-it-yourself kits and advertisements that look generic.
- „Send out enough mailings. Some promoters may promise more, but it is rare to see more than 1% or 2% of mailings generate a dealership visit. That might seem disappointing until you realize that if you send out 10,000 mailings, you can reasonably expect 100-200 people to come in. For a traffic-starved dealership, that’s a lot. The more mailings you send, the more customers you will see.
- ¼Send out the right mailing. The best mailings are those that condition the recipient to purchase a car. Viewed as a gimmick by many customers are scratch tickets with prize amounts that may be uncovered only in front of a dealership employee. Instead, use fliers that advertise particular deals or savings on a new car during the sale period. The oft-used $99 down, $99 a month may be a cliche, but it is effective at driving event traffic to your door and implying a serious vehicle purchase rather than a prize. Avoid any promotion that resembles a game of chance. Rolling the dice is not what many serious customers want to do in conjunction with a car purchase and a major financial transaction.
- áTarget the right people. A shotgun mailing that is targeted too broadly will result in many uninterested customers. To get maximum benefit from your sale, send fliers to those who are potentially interested. Future lease maturities and former customers can be good sources. When selecting mailing lists, target those who live nearer the dealership. Consider excluding people who have bought a car in the past year or two; chances are slim they’ll be in the market again that soon.
- ÞPut up the big top. While a circus atmosphere can be distracting to both customers and staff, people still equate a big sale with a big tent. Putting up a tent and laying out food and drink and giving balloons to the kids can get people into a buying mood. If nothing else, your hospitality encourages them to listen to your sales pitch. Don’t overdo it, or the food will overshadow the sale. Grilled chicken and burgers to order make it seem like you are running a restaurant.
Jesse Berger, a recent political science graduate of American University in Washington D.C., worked summers as a sales consultant at a New England dealership.