Common sense tells us that shooting ourselves in the foot is not a good idea. But how many times do we do that anyway? It happens when we fail to plan properly or don’t plan at all. It happens when we fail to attend to fundamentals. I’d like to investigate a number of ways we often shoot ourselves in the foot in nonprime auto sales. If you fail to plan or control certain areas of the nonprime sales process, getting shot in the foot is no one’s fault but your own.
Your planning should always include evaluation and reinforcement of nonprime fundamentals. Why? Fundamentals work. Don’t mistake fundamentals with “basic” information. Fundamentals ensure you have a foundation on which to build success. One such fundamental includes: “Properly managed, nonprime customers are sold completely backward from prime customers.” The message there is that you must first take control of the sales process. Control means that you direct the timing and choice of product decisions. When it is time to talk about product decisions, it is critical that you ask product questions properly. This month, we are going to talk about how to do that without shooting yourself in the foot.
1. Managing Customer Expectations
I believe the most important factor in controlling the product decision process is managing customer expectations. If a customer’s final expectations for a product or payment are not met, it is unlikely that he or she is going to buy a vehicle from you. Some customers begin with reasonable expectations. However, it can seem at times that the majority come with unrealistic ones. Whatever their expectations, it is your responsibility to wisely lead your customers through the process. That means you help customers understand the realities of their current credit condition.
2. Selling the Credit Program
Begin by selling the credit program. Make sure they understand the concept of rebuilding credit, their need to do so and how your expertise can help. Don’t shortchange this process. Remember, nonprime auto sales begin with originating loans that re-establish credit. Then it becomes about selling vehicles.
A good way of doing that is by telling the customer: “We have programs that meet almost every credit situation. Once I’ve worked with our lenders to secure your approval and the program that best meets your needs, we will look for the vehicles the lender has approved for your budget.”
3. The Interview
Interviewing customers to find out what they’re looking for should never sound like an interrogation. The trick is to build rapport by being friendly while you’re talking to them. Look for intangibles that may help you discover their needs, values and expectations. For instance, find out if they are married and how many children they have. This could help you learn that a subcompact vehicle may not work for them. Ask general questions about their vehicle choice. Stay away from questions that lead them to specific vehicles. Here are four discovery questions you can put to use:
• Are you replacing another vehicle? What type of vehicle was that?
• How will you be using your new vehicle?
• Are you looking for a small, mid-size or full-size vehicle?
• Two or four doors? Automatic or manual transmission?
Asking general questions will allow you to keep more options open when it comes time to meet a particular payment call and/or structure. The payment call provided by your lender will determine the finance-appropriate price and product decision. Whether you first submit the application to a lender that provides a payment call or an approximate payment the customer will qualify for, you should try to prevent the customer from “landing on a car” he or she will not qualify to buy. Rather, you want the car to land on the customer.
After a manager reviews the information, he or she should select the vehicles that fit the general criteria, down payment and monthly payment range of your customer. Tell the customer, “Congratulations, we have three vehicles that are just what you are looking for. I will show them to you and you can pick which one you want to take home.” This allows the customer to feel like he or she has a choice and is not being forced into a particular vehicle.
After the proper education process, you will find that many customers adjust to reasonable expectations and will gladly buy one of the vehicles you present to them. They grow to understand that what they need is good reliable transportation that fits their budget, as well as an opportunity to rebuild their credit.
Tim Shea is president of Great Direct Concepts, a subprime automotive consulting firm. He can be reached at [email protected] or 800-430-5484.