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Done Deal

Getting 'Shopped'

October 8, 2012

A customer calls to inquire about a specific vehicle. He says he’s ready to buy now and only wants to visit the dealership to sign the paperwork. Do you negotiate over the phone or do you sell the appointment?

Most dealer consultants will recommend the latter, but what if the customer insists? That’s what my publisher did when he contacted a Florida dealership recently. He had a new live-in babysitter, or "au pair," as he calls it, and he wanted to lease a MINI Cooper for her. But the salesperson he talked to over the phone was giving him every reason not to buy from his store.

First, he said it was against store policy to negotiate over the phone. And when my publisher asked why, the sales rep said they don’t like to be "shopped." In other words, they didn’t want to do the deal because they didn’t want to compete for the sale. Then, frustrated that my publisher wouldn’t budge on his request, the salesperson proclaimed that only one in 10 phone-in customers are serious about making a deal. "Well, I’m that one customer," my publisher responded.

What the salesperson didn’t know was my publisher has been a loyal patron of one of the dealership’s sister stores. If he had, he would have discovered that he has purchased cars after negotiating over the phone, and he rewarded the dealership’s flexibility by buying just about everything on the F&I menu. Instead, the salesperson centered his pitch on the MINI’s cargo space, promising my publisher that he’d stuff himself into the back of the vehicle if he would please just visit the showroom.

Look, I get it. You don’t want to waste time on a customer who is price shopping you, and you sure as heck don’t want to be bidding against yourself for the business. I did make those points to my publisher, but he came back with an even better point: "For all the talk about the Internet customer, dealers still don’t get it."

So, gang, how do we deal with these types of situations? I don’t doubt the salesperson’s one-in-10 claim, but should that really stop you from realizing a potential sale? And should you even tell customers that being shopped is your reason for not doing a deal? Personally, I would have blamed the Red Flags Rule for my unwillingness to work the deal over the phone, but that’s just me.

Last month, we reported on an Internet shopper study conducted by Maritz Research. It showed that 78 percent of car shoppers used the Internet in their purchase or lease process. That high percentage, the firm said, is why more than one in 10 customers are skipping the test drive before making a purchase. Maritz also attributed those skipped test drives to a more pragmatic car buyer who is simply interested in a vehicle that gets them from point A to point B, which is what my publisher was after.

As for being shopped, Cobalt released a study that identified three types of shoppers: Internet-savvy Miss Pop Culture, The Modern Family shopper, and brand-buying Mr. Big Wheels. During her 36-day shopping journey, Miss Pop Culture looked at eight different dealerships, the study said. The Modern Family buyer looked at the same number, but took 90 days to make a selection. Mr. Big Wheels consistently went back and forth between multiple dealer sites during his 45-day run. What all three groups had in common was their vehicle and price comparisons were done between brands, not dealerships.

Look, I know the goal is to get the customer into the dealership. That’s the only way we can be certain they’re serious about buying. But there are companies like SunTrust Bank, Bank of America and CarFinance Capital that are willing to take a chance on an undecided customer. What they’ve done is create web portals aimed at capturing the shopper’s financing before they make a vehicle selection.

Even Douglas Duncan, chairman and CEO of Safe-Guard International, talked about the direct channel when I spoke with him last month about his new finance company, Global Lending Services. Duncan said his company is focused on the dealer channel, but admitted his interest in establishing a direct connection to consumers via the Internet.

Look, I’ve written that we shouldn’t allow studies on today’s Internet shopper to dictate the way we conduct business. But I’d be doing you a disservice if I didn’t tell you there are companies positioned to give Internet customers exactly what they want. Does that mean we should do the same? Not necessarily, but we better have a better reason for not doing a deal over the phone than not wanting to be shopped.

Comments

  1. 1. Steve Finlay [ October 18, 2012 @ 08:10AM ]

    Oiling the skids on this one would have been a CRM system allowing the salesperson to call up the customer's history at the dealership group. Aside from that, the salesman inastutely missed a lot of early cues showing buyer seriousness that should have overridden store policy about not negotiating over the phone.

    Thanks for reading, Steve. And, yes, that was my thought. I think the salesperson never took him seriously, and now he's out of a sale.

  2. 2. Austin Dial [ October 18, 2012 @ 10:59AM ]

    The sales person was weak! Phone trainers must be weak too! End of Story!

  3. 3. Nikolas Tries [ October 20, 2012 @ 10:47AM ]

    I sell the vehicle. Thats how we move 300 units a month with 6 guys and no managers.

  4. 4. howell clark [ October 26, 2012 @ 08:53AM ]

    being self employed and out of the new car loop for sixteen years i can't agree more with the gist of steve finlay's reply,but with two questions. wouldn't a crm system have shown previous sales person which sales up should have called in and secondly if this customer was such a repeat customer why didn't he call up his last sales person at the sister store to be refered to someone if the sister store wasn't a franchise for the mini. still very poorly handled. sell over the phone you have nothing to lose. 1 out of 10 is better than zero.

  5. 5. Sheldon Wolff [ November 06, 2012 @ 04:07PM ]

    This story isn't anything new, I don't want to read the book, just give me the cliff notes on it or the readers digest version. I would have asked how much was he thinking of spending, if he was a sister dealership client then sell the reputation of the service etc. if you can't slow this guy down then give him a price that he'd feel and the dealership is comfortable with. There are no secrets anymore with the Internet, costs profit margins, are all disclosed. One thing I can say that my father taught me is business is a vegetable soup, some's meat, some's potatoes,some's peas. But when your done eating you're full! We all can't hit home runs on every deal, quick nickels is better than slow quarters in today's economy.

  6. 6. Craig Bates [ November 13, 2012 @ 09:39AM ]

    It is obvious this salesperson was not very experienced. Asking qualifying questions as to the customer needs come first along with building rapport whether they call or come through the door. Smoke out their true intentions. A good question would have been "Have you ever purchased from our company before?"

  7. 7. Retail Showroom Spaces fo [ November 18, 2012 @ 04:00AM ]

    Wonderful information, I had come to know about your blog from my friend nandu , hyderabad,i have read at least 7 posts of yours by now, and let me tell you, your website gives the best and the most interesting information. This is just the kind of information that i had been looking for, i'm already your rss reader now and i would regularly watch out for the new posts, once again hats off to you! Thanks a ton once again, Regards, <a href="http://www.spacemattersrealestates.com/hot-property/Retail_Showroom_Spaces_for_rent_in_Hyderabad/4767">Retail Showroom Spaces for rent in Hyderabad</a>

  8. 8. Vasilisa [ November 30, 2013 @ 06:25AM ]

    You know why sales people don't bother with this mess? Cause they are commission only. This is how they make a living. People have no consideration for others time or money and all they care about is themselves. No one wants to spend 7 hours or days negotiating with a clown that's playing he said she said and working dealerships against each other until the sales rep is down to making $100 for all that work. People can't work for free. Sorry. You know what, the next time I walk into a restaurant I'll tell the server, "I'd like a menu please. Could I sample this and this? Oh no I'm sorry I'm just looking... but is this your best price?" Waitressing is like being a slave, but at least they get paid a little something hourly and get to spend some measure of time with family. You know I think I'll start wasting other peoples time EVERYWHERE. See how it makes them feel.

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Author Bio

Gregory Arroyo

Executive Editor

Gregory Arroyo serves as executive editor for F&I and Showroom magazine.

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