Policy and Procedure for Profit                   

Policy and Procedure for Profit takes an honest look at Dealership Problems, and Recommends Practical Solutions that will significantly Increase your Bottom Line!

All things being equal, A Dealership will sell X amount of units primarily based on four things: Inventory, Advertising, Personnel and Market Conditions.

The Question is how much Profit you make and how much will you keep?

Doing the Same Things Over and Over and Expecting Different Results is Insane.

Until recently "If you'd always did what you've always done you would always get what you always got", not any More! The Market has changed. Fortunately, the Customer hasn’t. However, we still turn “Buyers into Shoppers” every day by how we treat them and work our deals.

  • Who Runs Your Sales Department?

Most Dealerships allow Salespeople access to One or more of the following; Invoices, Used Car Costs, Appraisals, F&I Rate Sheets, Factory to Dealer and Consumer Incentives, Credit Bureaus, Computers or Factor Charts to Quote Payments. And we Wonder why your Profit is where it Is. You should be Grateful for what you do retain! Most of your Profit is given away before your Customer enters the Showroom to negotiate the transaction! 9 out of 10 Times you end up "Backing in to a Car Deal" to get to a certain payment and/or trade difference or allowance. Sound familiar?

  • A Salesperson will always take the "Least Course of Resistance". It is easier to work the Desk than the Customer.

Remember what it is like to be "Under the Gun" at 5:00 pm, trying to "buy a car deal" just to put something on the books? Many Salespeople and Managers work every day and every deal under the same pressure and thought process. "Scared Money Can’t Win". First, if a Salesperson has not done his job (More on that Later); He hasn’t earned the right to ask for a Fair, Just and Equitable Profit. If Five or Ten Minutes after meeting a Customer, the Salesperson is in the Manager’s office needing the "Absolute Best ", "One Shot", "He’s Shopping", "I need to Sell a Car, Please Help Me, “We have had the unit forever” Price". Fire Him or Train him but do it now. He is costing you a fortune. And bye the way, it is less expensive to Develop and Train Salespeople for Life than it is to replace them.

·         You cannot have Customers for Life without Employees for Life.

·         Salespeople must Learn how to Slow a Prospect Down and Create a "Different Buying Experience" if they want to hold Gross. They must earn the "right" to make the Sale and a Fair Profit.

They will continue to rely on you to "Load up in the Trade" to "Give a Prime Piece of Inventory Away to put a Number on the Board. You Can’t Spend a Number and Lost Income Opportunity is Never Recovered. You Create a Weak Salesperson who is destined to fail. You can continue to Feed Weak Salespeople a “Fish” (or “Bone” as we like to call them) or teach them “how to fish“. So You don’t Fail. Salespeople Cannot Fail, only the Manager who is unwilling to train, inspect what you expect, and demand policy & procedure be followed to the letter.

From a National Research Source: The Following Buyers Purchased a Vehicle within 12 Months from the date of Survey.

·         92% Do Not Receive a Proper Product Presentation

·         78% Told Salesperson they were "Just Shopping"

·         93% Salespeople Failed to Follow-up

·         89% Believed Salespeople Did Not Know Their Product

·         92% Did Not Recall Their Salespersons Name 12 Months after Purchase

Why People Bought:

·         91% Helpful Salesperson.. People Buy Form People they like.. The Opposite is also true.

·         80% Product Presentation.. People like to be sold.

·         78% Perceived Good Deal.. Perception is everything!

·         70% Unit in Stock.. Land in Stock (Step 4)

When People Buy:

·         72% Purchased Within 48 Hours

·         92% Purchased Within 14 Days

Comfort Zones Will Determine Your Profit!

And Never Forget.. Comfort Zones are not easily changed.

Policy and Procedure Basics:

The First Time Anyone for Any Reason is Allowed to Break Policy & Procedure Without Swift, and Severe Consequences, All Other Dealership Policies Will Never Be Taken Seriously and Your Ability to Manage Effectively will be Reduced Significantly!

The Fear of Losing or Alienating One Customer.. Results in the Loss of Many!

·         100% Management Turn.. No Exceptions. I Repeat.. No Exceptions! Nobody Walks Until the Boss Talks. A Change of Face is Still One of the Most Powerful Tools Available. A Sales Manager must take a turn on every customer, Sold or Not. Though it is Equally Important in Both Cases for Different Reasons; a courtesy "Thank you for considering our Dealership, Have you Received all the Information You Need or Requested to Make a Buying Decision?" Will Produce an Additional 10% to 20% in Volume if Done Correctly.

·         100% Follow-Up.. No Exceptions! A Name, Address & Phone # is required on all Customers. It is Frustrating Our Prospects Don't Follow-Up Better on Our Sales People so we must do a Better Job following up on Sold and Unsold Customers. 9 out of 10 Consumers who Purchased Vehicles in the last 12 Months cannot tell you the name of the Salesperson who sold them their Vehicle. Sad but True. Closing ratios as well as Customer Retention can be devastated by a lack of follow-up. 9 out of 10 Salespeople Do Not Follow- Up, Therefore it is up to the Dealership to require it. Look at your Cost to bring a Single Prospect in the Front Door then ask yourself why you would not do Everything Possible to maximize each and every "Opportunity to do Business."

·         Follow the Steps.. They are in Order for a Reason. Without a Proper Product Presentation and Demo Drive, All you have to Sell is Price and you Cannot Win. Statistics confirms 94% of our Customers will Not Buy a Car Without Driving It. Pretty Simple Stuff yet we Continue to Negotiate and Give Shopping Packages to Prospects who have not Received a Proper Demo or Product Presentation. 8 out of 10 Buying Customers List the Product Presentation as a Determining Factor in their Decision. Any Dealer in Town will take your Customer and Often for Less than a Hundred Dollars. The Steps Establish a structure that will allow a Salesperson to Slow a Prospect Down, Establish a Relationship, Qualify Wants and Needs, Present & Demonstrate the Product and Ask for the Sale. Joe Verde provides one of the most Effective Automotive Training Programs Available. Eliminate Inventory Price Lists.. If your Inventory is so large or your Sales Dept. is Unwilling or not required to walk and Learn the Inventory Daily; and You feel it is necessary to provide a List, Do Not Include Prices.. Period. You are Enabling Weak Salespeople. Why should a salesperson "Walk the Lot" or check with his Manager to see if a new or used specific or similar unit is in stock, incoming, being traded for, or can be acquired if he can rely on his week or two old, incomplete inventory list.

·         Incoming Sales Calls must be handled by Managers or Salespeople who have been Properly Trained to Obtain Name & Phone Numbers and Set Appointments. Tom Stuker provides one of the Best Phone Training Programs but others are Available. 92% of Potential Customers who are given a price Over the Phone call Another Dealer who assures the Prospect 100% of the Time "I Can Beat That Deal" There are Only Two Things you can accomplish by phone. Obtain a Name & Phone Number and Set an Appointment. We Will Discuss How to do this later.

·         Turn your Inventory.. Period! You can Debate Tim Deese's Theories or any other School of Thought but the results are the same. Any Manager knows what happens with Dated Inventory, New or Used. Salespeople either Walk Around it or use it as a tool against the desk in order to load up in a trade to back into a Payment, Price or Trade Allowance, Because it is Infinitely Easier to Work the Desk than it is the Customer, Especially if a Salesperson Knows you have to Move a Specific unit which usually includes a Substantial "Minimum Commission". A percentage of the gross on aged units is more productive. Just Remember; If the first words out of a Salespersons mouth when you are ready to "Pencil a Deal" are in reference to the units age or amount you own it for, You are being Worked, not the Customer. It's Time for a Turn Now if you Hope to Salvage any Gross Profit! We will Discuss Inventory Management in a later Section.

Stop Selling Price Alone.

There is Nothing Wrong with a Customer Asking for the Best Price. However, It is Paramount to Understand the Question Itself is a Defense Mechanism. Many Factors Govern the Buying Decision with Price Remaining Between 5th & 7th Place in "Order of Importance" on All Surveys. When a Salesperson approaches you in a store and asks "Can I Help You"? 9 out of 10 times you respond "Just Looking" whether you Need Assistance or Not! It is a "Conditioned Reflex". A Customer must be assured, he will receive the Lowest Possible Price Available in Addition to Top Trade Values, Warranties, Financing and other Information Necessary in Making a Buying Decision. You Must Sell Yourself, the Product and the Dealership as well as Give the Prospect a Reason to Buy, Buy Today and Buy from You if You Expect a Decision to be Made Now. Otherwise the Prospect has No Reason to Make a Decision Now. When you Buy Medium to High Ticket Items, You Look and Ask for the Best Price Once you've considered the Products Reliability & Warranty as well as the Merchants Reputation. The old saying “The Sweet Taste of a Low Price is Long Forgotten after the Sour Taste of Poor Service" is Still True. There are Many Factors in the Buying Decision Including Emotions. If all your Salespeople are able to sell is a Lower Price and/or Higher Trade, They are costing you a Fortune. Implement and Require the Policies and Procedures Necessary for Maximum Profit.

This Newsletter is a "Work in Progress" with One Goal. Provide Information, Scripts and the Tools Necessary to Maximize Profits and Retain Customers and Employees for Life.

The 10 Step Selling Process: Overview & Analysis

A brief overview of the 10 steps to the sale will be followed by in depth analysis of each step with extensive script, theory and application in following Newsletter Updates. The Steps Provide a Structure that Allows a Salesperson to Slow a Prospect Down and Provide Enough Information to Make a Buying Decision Now!
When two people meet on the lot, someone is sold. Either they sell you that no matter what you say or do, they will not buy today. Or you provide enough information and reason for them to make a buying decision now, and from you.

Steps to the Sale

1. Meet and Greet
2. Sell Yourself
3. Qualify (Wants & Needs Only!)
4. Land in Stock
5. Feature Benefit Presentation
6. Demo Drive
7. Trial Close
8. Appraisal (Reverse Presentation)
9. Ask for the Order
10. Help! (If you need it)

Step 1

Meet & Greet:

Sales are Made or Lost in the First Few Seconds of Contact. Every Aspect of how you Dress, Talk, and Act will determine whether or not you make the sale. If you want to sell a car, it would benefit you to first, make friends with your prospect and find a “common ground”. This begins with a timely, professional greeting within 60 to 90 seconds of exiting their Trade-In. A person who is going to spend several thousand dollars would rather spend it with someone who looks like a Banker, Accountant or Lawyer and not a Salesman Stereotype. Dress the Part and look neat and Conservative. If you do no have an Extensive Wardrobe which most new people in the business do not, then you must invest in yourself. A couple of dress slacks and white/blue shirts will allow you to mix and match with one navy or gray Blazer. Then every time you get a Commission Check use part to replenish or upgrade wardrobe. You’re Income and Future Opportunities Depend on it. Note: Walk up with Enthusiasm and Excitement. It's Contagious. Greeting: Welcome to ABC Motors. My Name is Mark Proctor and You Are? Extend handshake and shake firmly releasing after prospect responds with their name, immediately followed by "How may I be of Service? This will usually prevent the customer’s conditioned reflex "I'm just looking". The standard greeting of I am, You are and How may I be of service can be incorporated into any Dealership Greeting and is the single most non-confrontational way to get a name without the standard "Just Looking" response.

Step 2

Sell Yourself:

Step 2 begins with Step 1 and ends with Step 10. Every thing you do or say during the course of a sale will reflect on you and the Dealership you represent. How you Dress, Walk and Talk will determine your ability to establish a professional and friendly business relationship. • Dress the Part: Someone who is going to spend $10,000 to $30,000 plus dollars would rather spend it with someone who reminds them of a Banker or CPA, rather than a "Used Car Salesman" (Get rid of the plaid jackets and never wear sunglasses). • Be a Professional: Cut you hair, get a manicure and polish your shoes. Look and Act like a Professional. • Lose the Lingo: Usually within 30 to 60 days, new Salespeople have our language down pat. Unfortunately most customers still do not understand what being upside-down or flipped in their Trade is or if being a Ghost, Gypsy and Bandit is a Good Thing or Not? People buy from people they like and will not buy from people they don't. Let me emphasize this basic fact. If a Customer does not like you for whatever reason, they will not consummate a transaction unless it is "turned" to another salesperson or manager. Statistics show 15% of the Prospects you talk to will not buy from you simply because they do not like you or something you said. Often through no fault of your own! Turning your unsold prospects to another Salesperson or Manager for a "Courtesy Turn" alone will result in an increase of 15% to 20% in your production for two reasons. It Reconfirms Information and allows a Customer you may have alienated unintentionally. Note: The "Turn" will be discussed in depth later.

Step 3


The better you are able to qualify a prospect, the better you are able to "Land in Stock" (step 4), thereby significantly increasing your percentages of closing the sale on the first visit to the Dealership. Although an entire book can be written on the subject, the quickest and easiest way to qualify wants and needs is to simply determine why they are trading or adding a car. The more you know about what they liked and disliked about their trade and what features are important in the new vehicle, the better you are able to sell and un-sell the features and benefits necessary to Land a Customer in Stock and Close the Sale. It is important to understand what will be the primary and secondary uses of the vehicle, as well as wants and needs of the prospect in order to sell and un-sell the features and benefits of the units you have in stock. Understand what other products the prospect is considering and of these which ones has he driven or eliminated and why? Due not assume anything. If a prospect indicates a financial criteria; exact payment, dollar amount or difference, Find out what is the basis for this specific criteria. A dollar or difference is usually indicative of a payment issue that might allow you to offer more vehicle for less payment under more creative financial options and thereby eliminating potential competition. The quickest way to turn off a qualified prospect is to let him think you are trying to determine his or her ability to buy. Never Qualify a Prospect Financially unless the prospect directly questions his ability to qualify. At this point it is even more critical not to take Shortcuts. The more a prospect is sold on the Product, Dealership and Salesperson, the more he is willing to do to get approved. Never forget that. If someone wants a vehicle bad enough, he will do whatever necessary to get the required down payments, co-signer or both.

Step 4

Land in Stock:

More to follow...

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