07 Jan Using Guerrilla Tactics to Combat Declining Vehicle Sales Gross Profit
Recently I saw a study that said that one of a dealer’s biggest concerns moving forward was declining gross profit per unit sold. As this question is debated at automotive dealerships and 20 groups across the country, we always seem to arrive at the same solution: Sell the value of the vehicle, don’t shortcut the presentation process, don’t discuss price on the lot, and any of the other things we’ve heard time and time again.
Here’s the problem with those solutions―most of the customers that we spend the majority of our day focused on have already been shopping. In many cases they’ve been shopping for days and weeks, both online and in person. So while the customer that has shopped will probably appreciate your salesperson’s thorough demonstration and the demo drive between Detroit and Cleveland, the bottom line is that no matter how much value you collectively sell, you’ll still hear, “We know how much we can buy this vehicle for because we’ve been shopping.” I don’t care how strong your salesperson is or how wonderful a closer your manager might be, if this customer has been shopping for any period of time, there might not be much gross left on the table. So what’s the answer? How do you dramatically increase your gross per unit? The answer is to get to the customers before they get to you. What I refer to as “ambush opportunities.”
When I was in the Marine Corps, one of the first things they taught us was that it’s better to be in the offensive position than in the defensive position. In other words, contacting the target before they contact you definitely puts you at an advantage. In our case, we want to contact customers before they’ve had the opportunity to shop 15 of our competitors.
Who are these customers and where do we find them? In your sold client base and in your service database of customers with three and four-year-old vehicles. What I’m talking about is drawing customers into the market before they’re even thinking about it. Giving them a reason to come see you before they normally would have. All some people are looking for is an excuse to do something sooner rather than later. It’s our job to help them with that excuse, that justification. In most cases, not only will you sell that customer a vehicle, but you’ll also have an opportunity to build your used car inventory.
If you’d like more information as well as a real game plan for how this can be accomplished at your dealership, please call for information regarding one of my future “Management by Fire!” events.
Alan Ram is the founder and president of Proactive Training Solutions. NCM Institute sponsors Ram’s sales manager training workshop, “Management by Fire!” Reach Proactive Training Solutions at 866.996.4665.