Closing UP
I’ve rarely met with a dealer without the motive to sell more cars with higher gross.
And, not surprisingly, one of the most popular questions I hear from dealers is how to close more deals.
The formula for more volume isn’t overly complicated.
The simple recipe is this:
The right inventory + strong lead generation + a strong selling process = desired volume.
However, it does not take very long for growth and increase to feel complicated. So let me offer some keys to closing more customers – assuming you have the right inventory and lead generation.
Know your closing model:
To set the table, you must have a sales process to prepare for
a strong close. And even with a sales process, you also need to identify how you will set the chess board to close sales at the end of that process.
In the independent retail world, there are several models to execute the close. Among them:
• The sales professional closes the customer on the vehicle, the manager negotiates
the terms and the finance manager sells back-end products and wraps up the paperwork.
• The sales professional closes the customer on the vehicle, the manager negotiates the terms and sells back-end products and the finance manager wraps up the paperwork.
• The sales professional closes the customer on the vehicle and negotiates the terms and a finance manager sells back- end products and wraps up the paperwork.
• The sales professional closes the customer on the vehicle, negotiates the terms and sells back-end products and the finance manager wraps up the paperwork.
I witness those models and variations of them practiced in dealerships across the country on a weekly basis. There certainly is not a right or wrong way to do it. I am continually impressed with dealers who are able to modify the closing process to creatively cater to the skills, talents and capabilities of their sales team. The key point is that dealerships should take a step back and look at the different models, then make a conscious choice and install their model the best they can. It doesn’t have to be perfect in the beginning. It can always be enhanced over time.
Once the model is implemented, you can use the remaining points to evaluate whether your closing process is on track.
Wait times: Customers hate to wait all day to take delivery. The time from agreeing on the car and negotiating terms to the customer getting into the finance office to wrap up the paperwork is typically the longest waiting time in the buying experience. We know that.
Competitive dealers are finding ways to make more use of that time. Here are a few ideas for how to turn that wasted time into a better closing experience:
• Walk customers through the service department and explain why they should use it.
• Set up their first oil change.
• Introduce the service manager.
• Have them complete an online review of the dealership.
• Here’s my personal favorite: Physically deliver the vehicle (you’d better be using a delivery checklist) prior to going into F&I.
• Take photos and videos for testimonials.
Finding creative ways to occupy customers will decrease their anxiety of long wait times and ultimately create happier customers.
The other side of that coin is having the sales professional sit across from the customer for an hour attempting
to make small talk. That approach is not recommended.
Two closes: There are two closes in a car deal.
First, we must close the customer on the car. That is a critical step.
Far too often, sales professionals and managers attempt to move to negotiating without a solid commitment from the customer to buy a specific car. There is absolutely no reason (outside of a drawback objection) that is a good idea for anyone involved. Moving to terms prevents the demonstration of a different vehicle. Ultimately, you will lose that customer.
Getting a commitment on a car is universally the sales professional’s responsibility. That commitment should
be received from the buyer after a proper demonstration. That is a critical step in the process. Until the customer confirms this is the right car, we are not moving forward to discuss terms.
That’s a fundamental practice and easy to train the sales team to do. If the customer does not confirm and offers an objection, those objections are typically very easy to answer. Buyers often attempt to bypass confirming on the car because they are afraid that might be interpreted they are confirming on the terms. That’s reasonable.
So reassure customers they are not committing to the terms – only the car. Very straightforward conversations with buyers make that an honest and quick conversation. Who should close on the car: Closing on the vehicle is typically a responsibility given to sales professionals. They are charged with demonstrating the right vehicle, providing a walk- around to pronounce the features and benefits of the vehicle, and getting a confirmation to purchase.
Common objections on the sales lot are drawbacks (as opposed to misunderstanding, skepticism and indifference). Drawback objections are voiced when customers have offered several benefits but there are one or two features they do not like.
Determining if the drawback can be overcome is more of an art than a science and can require some assistance from the manager to determine if an attempt to close on terms is worth the effort based on the drawback.
Few sales professionals understand the different types of objections and most have difficulty making that choice.
I advocate most of the time moving on to terms and negotiating if a drawback objection is posed.
That might seem counterintuitive. But if you work through the sales process correctly, you are demonstrating the vehicle in your inventory the customer is most likely to buy, based on his needs and wants.
An example of a drawback situation is a customer who likes the gas mileage, style, safety and options on a vehicle but doesn’t like the color. It is rare for a manager or other member of the team to get involved in closing on the car itself. But with that in mind, let’s take a quick step back.
A common pitfall is in the training of the sales team. A successful training program eases new sales professionals into the process from front to back.
Start by teaching the salesperson step one. Let her get comfortable and competent before moving to step two. That is repeated through the entire sales process. Use turnovers each time the new salesperson reaches her latest step of competency.
That training path is unique from traditional methods. It offers value because it eliminates “brooming” prospects while giving sales professionals practical experience in limited parts of the sale. It is also very easy to manage and access.
An example is teaching a new salesperson how to conduct a proper meet and greet, then T.O. (turn over) the customer to a manager.
If the manager doesn’t have time to deal with the customers one-on- one, substitute a more experienced salesperson – who would be compensated for doing so if your team is on a commission pay plan. Once the new hire is competent at the meet and greet, teach her how to car down the prospect, then quickly T.O. Continue that training track through to the end of the sales process. It is the most efficient way to retain new salespeople and improve the overall health of the sales department.
Who should close on the terms: I define “terms” as the negotiation of numbers on the car deal, including price, trade value, down payments, interest rates and term of the loan. This is where independent dealerships diverge. Allow me to suggest never having a new sales professional show numbers. It’s just too risky. If that is your model, the sales manager should present numbers for an extended period of time, with the sales professional observing. How long is an extended period of time? It depends on the aptitude of the sales professional, but a six-month minimum is standard.
Another path is for the sales manager or finance manager to offer terms to the customer. If you are unhappy with your volume and gross profits, have your managers close every deal for 30-60 days and compare the results against your regular process.
Who should sell back- end: Current models range from sales professionals to sales managers to finance managers.
Startups with small sales teams should use the sales manager in this role.
Back-end products offer unique hurdles, including required full disclosures. As the dealer, you need to be certain someone is protecting you from disorganized or flat-out illegal disclosures on warranty products.
Many independents struggle to capitalize on income opportunities available through back- end products.
Who should wrap up the paperwork: A few models have finance managers wrapping up paperwork, but a good number of independents use more of an administrative role.
Some dealers have a “finance manager” who doesn’t sell anything at all but simply does a very thorough job of presenting and finalizing the paperwork. The drawbacks to that are obvious: It gives that position a non-revenue producing role.
Don’t forget the delivery: Outside of the demonstration and walk- around, one of the most underdeveloped areas in the sales process today is the delivery of the vehicle.
