Auto Dealer News & Information

Wait for the next big “savior” program or get back to the basics?

By August 31, 2009April 24th, 2020No Comments

My first experience with auto incentive buying was in August of 1986.  It was my first year in the business and General Motors announced 2.9% financing for a 36-month loan.  In today’s era of 0% loans being commonplace it may not seem to be that revolutionary but in the mid 80’s double digit rates were the norm.  Ford and Chrysler soon matched the rates and the war was on.  There was a hysteria created and I believe it changed the way consumers shop for cars.

Fast-forward to the mid 90’s and the “Slasher” era.  We trained the public to wait for the next big sale.  We offered trips, hot dogs, cash and everything but eternal life to get visitors to our showrooms.  Once there, they negotiated away most of the gross profit, serviced their vehicles themselves or at a local discount shop, and probably were not our best ambassadors in our local communities.  We did it because the pressure has always been there to sell more cars regardless of the long-term effect.

We have just experienced the phenomenon known as C.A.R.S or Cash for Clunkers.  I say phenomenon because of what I repeatedly witnessed firsthand in the last few weeks.  I saw people visit showrooms with a virtual $4,500 government check in their hand and they were going to spend it no matter what.  It didn’t matter that the vehicle they preferred to own had been sold out for weeks.  They were going to get their share of the entitlement and nobody was going to stop them.  I was consulting for a Chrysler store in Orange County when someone came in shopping for a Jeep Liberty.  When informed that those were no longer available they asked for a Patriot.  Same story.  “How about a Dodge Caliber?”  Sorry.  “What DO you have that qualifies?”  ½ ton Ram pick-up.  “What color?”  They went from a vehicle that we had trouble selling 6-months ago to a full-size pick-up.  Try managing a “road-to-a-sale” process for that scenario.

I believe the way to stop this insanity of “hype” advertising and selling is to do what we should have been doing all along; maintain significant contact with our owner base.  All of us know that our best prospect is our loyal list of repeat customers.  If best means highest gross profit potential, loyalty to our service department and a great source of referrals.  “Significant” contact doesn’t just mean a subscription to our online newsletter and an annual birthday card.  It means knowing more about that person, their family and their community than our competition could ever hope to know.  It means helping them retain the delivery “ether” throughout the ownership experience.  It means following up with them because we want to not because the factory is forcing us.

We have seen a lot of re-engineering over the years and it is time to do that now with our sales and follow-through processes.  Most of us have a CRM in the store that is being under-utilized.  Commit to getting to know it and use all of the tools that you said you would use when you first committed the thousands of dollars you’ve already spent to get it.

The way I see it we have two choices; wait for the next big “savior” program or get back to the basics.

Your CyberSalesPartner,

Jeff Lambert

Dealer e Process