The Ultimate Guide To Increasing Sales – Car Salesman Advice

The Ultimate Guide To Increasing Sales – Car Salesman Advice

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The Blueprint for increasing car sales, from first hand experience in a high ticket item market.

What is the best way to sell fifteen cars a month?

How to sell 15 cars a month? Back in 2006, I used to sell 23 a month.  I can help.  Maybe.  Who knows.

What I would suggest?

Know your client.  Their lifestyle.  What they do for fun.  Where they went on vacation.  Then utilize heavy follow up.

Keep track of your 4-3-2-1 process. Understand everything about your product. Follow the ten steps to a sale.  Use a SPACED outline when selling your vehicle.

This works basically in any industry. All you have to do is modify some of the steps.  E.G. a realtor would show an open house as opposed to doing a test drive.

1.  Meet and Greet.

Your client will know whether they like you or not within the first forty five seconds.  Do this extremely well.  Don’t lack in any way whatsoever.

Example:  Hello, welcome to XYZ dealership, my name is Leonard, and you are?  Shake hand firmly.  How may I help you today?

2.  Sell yourself.

Build rapport with your client.  Find common ground.  This is extremely important.

3.  Sell the dealership.

Talk about the great things your car dealership does for your community.  How long your dealership has been in business.  Some perks.  Talk about how great your service department is and how they take care of their customers.  This is kind of important.

4. Qualify.

Get a general ideal of what they want.  Two doors or four doors.  Car, truck or SUV.  Small, mid sized, or full vehicle.  Light, medium or dark color.

To properly qualify a customer, show them a model less than what they are looking for first, to make sure the vehicle they want isn’t out their price range.  Example, if someone wants a mid sized vehicle, show them a Corolla before you show them a Camry.  If the customer overpredicted what they want, then they will say that’s what they want.  If they are certain what they want, then you helped reaffirm them by taking them to the Camry afterwards.

Walk them up to the window sticker, and ask them, does this vehicle seems to have the features you are looking for?  The customer is only looking at the price to see if it is within their budget.  If they say no, move them to another vehicle. If they say yes, then move to step five.

Exception:  If you have any warning signs, like the customer talks about a bankruptcy or some kind of other financial hardship during the qualification stage, then move directly to step 8 first before going back to step 5, so you can figure out what used car on your lot will work with their budget.  No one wants to buy a $7,000 used car when they test drove a brand new $20,000 car first.

5.  Demo the vehicle. Do a walk around.

A quality walk with a test drive should take around thirty to forty five minutes.

Ask, other than price, what are you looking for most in a vehicle?

They will answer with one of the following.

      • Safety
      • Performance
      • Appearance
      • Comfort
      • Economy
      • Dependability

First, get the key.  If keys are stored inside a box at the car, it makes the work a lot easier.  If not, then tell the customer you will be right back while you go to the main office to access the key for the vehicle.  Then come back, open the driver door to the car, then open the trunk, hood, and all the doors to the vehicle. Move the customer from the window sticker to under the hood.  Explain the vehicle following what they explained they are looking for in spaced.  Remember, what you explain your car has that the other sales person doesn’t makes your car better, even if the other car has all the same features.  Point out even the smallest of things.

Explain feature, function, benefit.  

Example:  

The most important feature to me is safety.  

Okay perfect, let me go over the safety features of the vehicle with you.  Do you know what this is?  

No.

These are your anti lock brakes.  They pulsate twenty two beats per second.  When you are about to get into an accident, or when a vehicle in front of you suddenly slams their brakes, the vehicle maintains control and doesn’t skid forward, allowing you to maneuver your way to avoid an accident.  That’s a feature that can save you in a scary situation, right?  Nod head up and down.

Yes.

Now see this here.  This little square on the bumper comes out.  If, God forbid, you were ever to fall into a ditch, this little square pops off.  You are able to have a tow truck tie a rope to pull your vehicle out of a ditch.  That would be very important, wouldn’t it?  Nod head up and down.

Look over here.  Do you see these little indentations on the hood?  These are crumble zones.  What they do, is absorb the crash energy and (deflect, depending on brand) absorb the impact of the crash.  This means that if an accident were to ever happen, instead of the crash energy being sent straight through your body, crushing your internal organs, it would be absorbed and deflected by the vehicle.  That could possibly save your life, couldn’t it?  Nod head up and down.

Touch on other parts of SPACED as well in the presentation, but make sure to put a lot of focus and emphasis on the key issue the customer is shopping for.  
Move to the driver side of the vehicle.  Point out the B pillars.  Explain how they absorb impacts.  Point out benefit.  Talk about paint.  Door Guards.  Other things.  

Move to trunk.  Show roominess.  Pull down seats.  Show how much storage room there is.  Talk about benefits.  Get inside the trunk.  Show them how much room there really is.  Close the trunk lid on yourself.  Open it back up with the emergency latch.  Show the customer that even if their child is stuck inside, that they could get out of the situation.  Tell them to get in the trunk and try it for themselves.  If they do, then you’ve sold the vehicle right then and there, almost guaranteed.  

Move over to the right side of the vehicle.  Let the customer sit in the back seat and see how roomy it is.  Point out features.  Move customer to passenger seat.  Close the door.  Get in the driver’s seat.  Explain more features.  Turn on the vehicle.  Ask, do you see how quiet the vehicle is?  

Explain navigation, if there is one.  Go over all the interior features and where all the buttons are.  Turn on radio.  Explain presets.  Move car into reverse or drive, pull out from the parking spot, then drive to the front of the main office building.  

6.  The Test Drive.

Ask the customer for his ID.  Go inside and scan or copy the ID and do what you have to do.  Drive the car off the lot.  Accelerate heavily.  Ask, did you see how well this vehicle accelerated?  Brake hard (in a safe location).  Ask, do you see how well this vehicle stops?  Pull over.  Switch seats.

Guide the customer around a square.  Only take right turns.  On the test drive, you stay quiet.  You only give directions and ask three questions.  I recommend stating one question on each of the turns.

Question number 1.  

Does the vehicle have enough power for you?

Yes.

Question number 2.  

Does the vehicle fit your comfort needs?

Yes.

Question number 3. 

Overall, does this vehicle have everything you’re looking for in your next vehicle?

Yes.

7.  Trial Close.

Once you pull back in the dealership, guide your customer to a parking spot.  When you get out and they hand you the key, you ask one question.

Mr./Ms. ____, other than price, is there anything else that is stopping you from buying the vehicle today?

If the customer says yes, ask what it is.

Handle that objection.  If the customer insists, then let them go and follow up with them.  Remember to give them back their ID.  If you don’t, they will think you’re deceptive and evil.

If the customer says no, you move to the next step.

8.  Write up.

Take the customer inside.  Seat them at a table.  Ask them if they want a water, soda or coffee.  If they do, PAY FOR IT AND BUY IT FOR THEM WITH YOUR OWN MONEY.  Then print a four square and a credit application and bring everything back to the table with you.  Fill out a credit application with the customer, first by copying the main information off the license.  Then ask if this is their current residence.  Fill out work history, etc.  Once that is complete, start working the four square.

There are four boxes here.

    • Trade.
    • Price.
    • Down Payment.
    • Payment.

Personally, I leave the price box blank all the time.  Then move to the trade.

If they do not have a trade, the deal is easy.  Trades are usually what kills a deal, especially when a customer is upside down.

If they do have a trade, appraise the vehicle with the customer.  To appraise the vehicle, take down pertinent information like miles, how much the customer owes on their loan, etc.  When outside with the customer, make it look like you’re really examining their car.  If you have no clue what you’re doing, at least make it look like you do.  Start the car.  Put it in all the gears.  Test the radio.  Look at the seats in detail.  Then go outside.  Open up the hood.  Just look at things and make like a hmm.. sound.  Go over the exterior.  Touch every single blemish.  Examine it.  Then make another hmm sound.  Don’t say anything, just touch and make a noise.

Go back inside.  Try to have a basic understanding of book values of vehicles.  Let’s say wholesale book on the customer’s car is $10,000.  Tell the customer, the last vehicle of this type you took in wasn’t in as good shape as your vehicle and wasn’t as well maintained.  We gave them $5,000 for his vehicle.  What that what you are looking for?  If they say “No, I was looking for $12,000!”, then you pause… Shake your head a little… Look down and say… I can’t guarantee anything as we haven’t thoroughly appraised your vehicle yet, but  if I could get you (Move in $500-$1,000 intervals, depending on how much you low balled the customer) $5,500 on your vehicle, would that work?  He will probably lower his offer, yet still probably be around the $11,000 range.  Repeat the same thing.  Ask him if you can get him $6,000 for his vehicle, if that would work.  They’ll stated something else.  Then ask, how close to $6,000 can you come?  They’ll give you a number.  Tell them you’ll try to get this number for them and you’ll fight for them.

Write down all these numbers.  Write your numbers big.  Write the customer’s numbers small.  Cross out the numbers that didn’t work.  Circle the one that the customer wants.

Next, move to the down payment of the vehicle.  Let’s pretend the car is $20,000 to make it easy.  Tell the customer, based on bank guidelines, the average down payment is 30%.  That would be $6,000.  They’ll respond and react, saying maybe they only have $1,000 down.  Cross out the $6,000.  Ask them if they could come up with $5,500.  In most cases, the customer will move up his down payment to $1,250-$1,500.  Ask them if they could come up with $5,000.  By this time, the customer will be up to maybe $2,000.  Then ask them, how close to $5,000 can you come?  $2,250 or $2,500?  They may say $2,250.  Then ask them, if I were to give you x days (I think it’s 14, could be longer or shorter), then how much closer to the $5,000 can you come?  Circle that number.

Then move to payments.  Take the amount of the vehicle and times it by three.  Then make all the numbers odd, so the math is harder.  Say, based on industry standards, the average payment for this vehicle will be $593.  If someone calls you out and say this is ridiculous, how did you come up with that figure, tell them it’s based on 3 years financing at a 7% interest rate.  It will be extremely rare for someone to call you out on this, and they will just work the payment instead.  Most people will toss out a number like $200.  For some reason, that’s the magic number everyone has when they want a vehicle.  Ask them if they will be able to afford the vehicle for $553 a month.  They’ll probably bump themselves up to $225-$250.  Then ask if they could do $537 a month.  They’ll probably bump themselves up to $300.  Ask them how close to $537 they can come.  Whatever they respond with, give them a range.  So if they say I can do $325, say so basically you can do $325-$350, right?  They’ll say yes.

Right now, you’re looking at a loser deal if you write it up exactly as stated.  However, this is a negotiation.  You’re putting realistic images into the mind of the customer.  The customer is trying to state their position with their irrational expectations.  Your job is to spend quality time doing this negotiation so the customer can understand that he’s going to be paying more than he wants to pay.  Also, inflating the numbers fixes any situation where a trade with negative equity can out price the customer, because they will have much more realistic expectations when you come back with a price.

The $2,250 for a down payment will cover a little more than the taxes.  The $350 a month will cover the majority of the cost of the vehicle, aside from about $2,500 of the MSRP, at five years at a 7% interest rate.

Tell the customer you’re going to be working for them and you’ll fight for them to try to do your best to get the deal they want.  Present this offer to your desk manager.  Fight for the customer.  Then when your manager presents you with an offer, take it back to the customer.

Tell the customer you went to bat for them.  Present them with your offer.  If your product demo was amazing, they will agree to buy on the counter offer.  If not, then you will have to go through this stage about one to two more times.  Eventually, you’ll come to an agreement and the customer will agree to buy the vehicle.  Then comes the next step.

9.  Finance.

Wait with the customer and have small talk until the finance office is ready for them.  While they’re in the finance office, take the vehicle to have it cleaned and prepared.  Once the customer is out of finance, sit with them and go over all the booklets with the customer and explain them.  Explain what the lemon law booklet is for, the tire warranty, the owner’s manual, the warranty, functionality of the keys, everything.  Make sure you include your business card with your direct cell phone number into their owner’s manual.  Then go with the customer to the vehicle, and if it has a navigation, explain everything you know about how it works, sync the customer’s phone, etc.  Then wave off the customer as they leave, only after thanking them for their business.  Then comes the final step.

10.  Ask for referrals.

Call the customer in a few days and ask how they are enjoying their vehicle.  Also, ask them if they have any referrals they would like to send off your way.
That would be how to better the efficiency of your sales.

Now, there’s a science to track all of this.

It is called a 4-3-2-1 sheet.

It is an excel spread sheet with a lot of boxes, printed on a piece of paper.  There is a row dedicated to each day.  Most people use it as a tally sheet.

The first box is how many customers you talk to that day.

The box after that is how many customers you test drove.

The following box is how many people you wrote up.

The last box is how many car sales you have.

With these numbers, you can calculate your percentage of customers to test drives to write ups to sales, to see exactly where you need improvement.  I think I only talked to 60 customers on the month I sold 23 vehicles, so I had a very high closing ratio.  However, I really knew how to study the science behind this sheet.

The target goal is to have 85-95% of the people you speak with test drive a vehicle.

65-75% of the people you test drive should be written up.

40-50% of the customers you write up should leave with a vehicle.

Back in 2006, the average car salesman would encounter 3 customers a day.  Car salesmen usually work six day weeks, so that would be about 25 days a month.  That would total up to about 75 customers.

The average car sales person, at that time, was selling about 8 cars a month.

Based on the 4-3-2-1 sheet, if 8 cars a month were sold, that means 16 were being written up.  The other 59 weren’t.

If the test drive ratio should be 85-95% and the write up ratio should be 65-75%, then we can see that the fault doesn’t lie in getting the customer to the write up table, but instead, it lies in getting the customer into either a test drive or a write up.  The reason for this is that most car salesmen ask their customers if they want to test drive the car.  If you read through my process, you can see that I never really asked the customer anything, except for what I knew they wanted.  I just assumed the sale all the way through, from the very beginning.

If only 16 people are being written up, more than likely only 32 people went on test drives.  That means that 43 people, or 57% of your leads were wasted, without being able to fully experience the vehicle.

In order to improve this ratio, you need to demo your product.  You need to get your customers excited.  You need to test drive your customers.  You also need to follow up, because a lot of the people who were just looking that day will be ready to buy in a week to a month.

Let’s say I sold 23 cars.  Let’s say six of those sales were made by following up with customers who had once walked on the lot.  So, that month, I sold 17 cars from new business.  That means I wrote up 34 customers.  I wrote up about 75% of the people who went on test drives.  That would be a total of 45 people who went on test drives.  I test drove about 75% of the people I spoke with.

Personally, according to this sheet, I spoke to less people than my fellow sales person.  However, my conversion ratio was much higher.  Without the follow up, I sold more than twice as many cars than they did.

The real life scenario was interesting as well.  The number one person in the store sold 25 vehicles.  I was number two at 23.  Number three had 18.  Number four had 15.  Then the rest were at 12 or less, in a store of fifty car sales associates, internet inclusive.

Why?

Because I didn’t prejudge anyone and I followed a strict outline to my process. I went over my numbers every single day to identify where I was lacking, to understand what I needed to do to improve.

Do you see how raising the test drive amount can raise the amount of vehicles sold in a month?

Oh wait, I think I showed you how to sell more vehicles than your target goal of 15.  I take back some of my advice.  Don’t try too hard!

Image Courtesy: Getty Image

Read original post on Quora here.

Leonard Kim also created the ultimate guide to online communication.  Find out more about his book The Etiquette of Social Media: How to Connect and Respond to Others in the World of Social Media.

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10 Comments

  1. Ken D. Webber
    March 13, 2014

    Sell on benefits not features. Sell the benefits on subtext. For example an inexperienced salesman would sell a guy features first noting style and perhaps leather seats. A more experienced salesman would first inquire about the man’s status then tell him that these seats… go way back! …unspoken subtext… he can get laid in THIS car. Everyone has a hidden trigger that they’ll buy on. That trigger is psychological. One guy buys to get laid, to pick up chicks. Another person may buy to make their friends envious. Still another only wants to purchase on utility and usefulness.

    Reply
    • leonardkim
      March 13, 2014

      Hi Ken, you’re absolutely right. It’s all about benefits when it comes to selling anything!

      Reply
  2. James W D
    March 13, 2014

    I am not in car sales, but I can see how a lot of this info could be carried over to other fields. I like how you use the 4-3-2-1 sheet method there to find out where you need to make improvements. reminds me of the spread sheet I used with my sales reps when I managed a T-Mobile Store. Knowing where you need to work on and where you are good at is a tremendous asset in sales.

    Reply
    • leonardkim
      March 13, 2014

      Hi James! I carried this over to every single industry I have ever worked in. It’s the perfect template to increasing sales. It just needs slight modifications from field to field. Data is everything when it comes to sales.

      Reply
  3. Daniel Kim
    March 13, 2014

    this is great. I’m in sales and I learned some valuable information.

    Reply
    • leonardkim
      March 13, 2014

      I’m glad you were able to learn something Daniel!

      Reply
  4. Brandon
    July 6, 2014

    Bro, solid stuff… Pretty dang thorough.. I feel like I could be a pro car salesman if I started tomorrow lol.

    Lots of marketing and persuasion psychology here demonstrated in a fluid context!

    Reply
    • Leonard Kim
      July 7, 2014

      Thanks Brandon! My friend’s boyfriend actually tried it out. Sold three cars on his third day at work!

      Reply
  5. JDC
    August 4, 2014

    Hi Leonard,

    Thanks for this excellent article – I have a question for you about sales/marketing strategy:

    I work in construction subcontracting. Our product category is commoditised, with only aesthetic differences between what we and our competitors sell. Architects like our product, but homeowners don’t want to pay more for standard finish items (except if their neighbour already has our product – keeping up with the Joneses is great for sales).

    The competition are killing us on price and we can’t get near to them on materials or labour cost. My hit rate on quotations is less than 1:10 and boss is breathing down my neck.

    How do I find some sales edge?

    Best,

    JD

    Reply
    • Leonard Kim
      August 4, 2014

      JD,

      I would love to explain more within this comment, however that would take a lot of time. I’m quite busy nowadays, but willing to do a phone consultation if you’re interested in compensating me for my time. If not, this is a great resource to check out. Roger Dawson – Secrets to Power Negotiating.

      Yours Respectfully,

      Leonard Kim

      Reply

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