AUTOMOBILE MANUFACTURERS AND THEIR dealers spend millions of dollars promoting their products in the marketplace, yet the final result is often placed in the hands of poorly trained salespersons. A mind set among many auto salespeople is that immediacy is the principal requirement for selling cars. The persistent philosophy for “successful” automobile selling during the past half century has been “sell the prospects the first time they come in, otherwise, you'll lose them.”
This belief has become a self-fulfilling prophecy. Follow-up on prospects by telephone has become a rare step in the selling of automobiles. It should be a routine step.
Statistically, three out of four prospects who come to dealers' showrooms depart without buying. Because the dealership has no follow-up plan, sales people give up 70% to 80% of their potential to other “one-shot” competitors, probably someone with a lower price.
In the 1950's, prior to the age of the current informed, sophisticated consumer, the rock ‘em, sock ‘em activity in dealers’ showrooms dictated a one-shot approach to selling. Salespersons had a minimum of product knowledge and an abundance of slick, high-pressure, deceptive methods for selling cars.
High-volume new car dealers practiced bait-and-switch selling, a widespread activity that advertised new cars at outrageous low prices. But in truth, the advertised model was not available at any price!
Another trick enticed buyers into signing blank finance contracts at the time of purchase, yet the dealership had no intention of fulfilling the declared bargain payments.
We've come a long way since those days. Honest, assertive selling should never go out of style. But today, sales follow-ups tend to fall short. Ansurvey confirmed the need for aggressive follow-up action if dealership sales departments are going to capitalize on their showroom floor traffic.
90% of the prospects bought somewhere within a week.
90% of the buyers were not followed up after leaving the dealership without making a purchase.
The average salesperson sees and talks to as many as seven prospective buyers face-to-face each day.
Only 20% of prospects buy on a first visit.
57% of buyers buy within three days of the day they start looking.
42% of buyers actually took the time to shop other dealerships.
Those statistics justify most dealerships establishing a figurative “second sales force,” consisting of existing staffers who can recover the prospects who fall through the cracks.
Reasons for developing a specialized second sales force to pursue unsold prospects are:
A lack of disciplined attention to prompt follow-up by the “experienced” salesperson who is accustomed to one-shot selling and who rejects new procedures.
Poor supervision by busy managers who are too involved with the dealership problems (other than sales) to insist on sales staffs' follow-ups.
The distraction of floor traffic that justifiably competes for the salesperson's attention.
George Libin, president of the Automobile Profit Builders in Wayland, MS, offers good advice for confronting some of the issues the NADA survey raises.
A prompt and properly handled call (within 24 hours) by the dealer or manager to a prospect can bring back 50% of first-time unsold ups. Of these more than half can be closed. After six weeks, a similar call may bring back another 14%, half of which can be closed.
Telephone calls by a manager (or dealer, personally, depending on the size of the dealership) must be in the context of the showroom visit and the caller must be prepared with authentic initial information from the salesperson so the call is meaningful to the prospect.
The caller must be candid with the prospect and be aware of the possibility his or her salesperson may have not been negotiating the proper vehicle for the prospect's needs.
The telephone is an important tool in any selling system and automobile salespersons have been avoiding its use for many years and may even fudge their reports to management on this issue.
Mr. Libin's advice, “Have the managers make the follow-up calls! If they succeed in bringing back 50% of these unsold prospects, and you get to close more than half of these, it appears to be well worth the time, effort and expense to train and develop the second sales force.”
Nat Shulman was owner of Best Chevrolet in Hingham, MA for many years.