The Relation Between Gross Profit and Sales Training – Sean Gardner, Trainer with The Joe Verde Group

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Recently, the CBT Automotive Network was on-location at NADA 2020 in beautiful Las Vegas where host Jim Fitzpatrick spoke with Sean Gardner, a trainer with The Joe Verde Group.

gross profit

Video Transcription:

Jim Fitzpatrick:
It’s always a pleasure catching up with the one and only Sean Gardner. I know that you know him because I get emails every time this lunatic is on with us because his energy level is like no other. So probably one of the best trainers in the industry, working for the Joe Verde Group.

Sean Gardner:
Thank you.

Jim Fitzpatrick:
Thank you so much. It’s so good to see you.

Sean Gardner:
It’s a pleasure.

Jim Fitzpatrick:
And I know you’ve already had six cups of coffee, so-

Sean Gardner:
Probably.

Jim Fitzpatrick:
… let’s go. Let’s go.

Sean Gardner:
Okay. Awesome.

Jim Fitzpatrick:
When we were talking to Joe about gross profit, we touched on the importance of training. If you want to see more gross profit, you’ve got to train your salesmen. Would you back Joe up on that?

Sean Gardner:
Absolutely. He’s my boss, but I would back him up anyways.

Jim Fitzpatrick:
Right, right. What do you say to the dealer that goes, “I don’t know. I’m not really so sure. I think we live in a digital world and I’m not so sure that the sales person say it today is as relevant as they were.”

Sean Gardner:
Yeah, yeah. Well, I will tell you this, first of all, everybody’s saying margins aren’t where they need to be, the gross isn’t where it needs to be, but you got to give credit where credit is due. There are a lot of dealerships out there right now doing four or five grand a car and they’re doing the volume too.

Jim Fitzpatrick:
That’s right.

Sean Gardner:
So it’s not everybody is suffering when it comes to gross. If you’re committed to training, if you’re committed to a value building selling process, if you’re committed to giving salespeople the tools they need to professionally and properly handle price on the lot when they close and in the negotiations, if you work the deals right, if you focus on the customer experience, you can still make a lot of money selling cars.

Jim Fitzpatrick:
Is that amazing?

Sean Gardner:
Yes.

Jim Fitzpatrick:
It’s just that simple, isn’t it?

Sean Gardner:
Yes.

Jim Fitzpatrick:
Yeah. And you bring up a good point that we talked about margin compression. I was talking to some dealers earlier and they said, “Well, our average gross profit was five grand a copy.” Of course that was front end and back end, but it wasn’t five grand average back end. They’re still doing a quarter a copy. You don’t do $2,500 average front end gross profit without good training in their dealership, right?

Sean Gardner:
Yes. Well, like I said, you got to give credit where credit is due, but there are some stores out there right now that are seriously suffering when it comes to making any kind of money on a new car deal.

Jim Fitzpatrick:
That’s right, that’s right.

Sean Gardner:
They’re advertising price, salespeople are selling price. When a customer first comes on the lot, they’re closing on price. They’re backing the manager in a corner to do nothing but dropping the price and then we’re doing bad terms to the business office. We’re not making any money back there either, okay?

Jim Fitzpatrick:
I know.

Sean Gardner:
Really it does come down to developing the salespeople’s foundational skills to be able to build value and make it about a value building selling process rather than just making it a price focus selling process. I think a lot of our sales people, because they don’t have the tools, they make selling price the habit.

Jim Fitzpatrick:
Yeah, yeah. And that’s a terrible thing to teach new salespeople when they come into the organization that we’re going to cure every objection with price, right? And we always fall into that in the industry.

Sean Gardner:
Yeah, yeah. A specific part of maximizing the gross on every car deal, sure, we got to teach our sales people how to handle initial price questions. Yeah, they got to learn how to close on value. Yeah, they got to learn how to handle price objections when they’re trying to close and get that now mindset within the customer. But salespeople today, they don’t know how to present numbers. They don’t know how to handle price objections in the negotiations. They don’t know how to handle trade objections or down payment objections and monthly payment objections. And then you’ve got these car dealers out there that they do a lot of leasing and they’re using leasing as a justification of why their gross is so low. And it all comes down to no tools and salespeople taking the path of least resistance because they got no tools.

Jim Fitzpatrick:
That’s right.

Sean Gardner:
Look, yes, I know you’re in a very competitive marketplace. Yes, I know you’re just trying to push out a few extra cars and meet your goals. And, yes, I know the customer is super hyper informed. I like what Joe says on this, not all customers are super hyper informed, but the thing about it is the ones that aren’t hyper informed, our salespeople are hyper informing the customers.

Jim Fitzpatrick:
That’s so true.

Sean Gardner:
Yeah.

Jim Fitzpatrick:
That’s right.

Sean Gardner:
Let me show you how you should buy a car here at our dealership rather than make friends, find wants and needs, put the customer on the right car, give the customer a good presentation demonstration, close on value and then teach salespeople how to handle price objections so the deal’s set up better.

Jim Fitzpatrick:
That’s exactly right. And isn’t it better that a dealer spends a few thousand bucks a month on training rather than willing to give up hundreds of thousands in the potential gross profit? That never made sense to me, right?

Sean Gardner:
Tell you what, what is that saying? They’re stepping over thousands to pick up pennies.

Jim Fitzpatrick:
Exactly right.

Sean Gardner:
We’re working with a large, large dealer group and they’ve just accepted the fact that you can’t make money selling cars.

Jim Fitzpatrick:
Wow.

Sean Gardner:
And that’s a shame because if we could just teach sales people … We’re working with the Honda store, a large Honda store, I’m talking five, 600 cars a month, and all we did was teach salespeople how to properly just handle initial price questions. Do you know the average salesperson’s given up $844 of their gross just by mishandling initial price questions? Some salespeople give that up as soon as they’re greeting. “Hi, I’m Sean. I want to save you 844,” right off the bat. But look, we’re working with this Honda store and all they did was teach salespeople how to properly handle initial price questions and concerns that they do get out into the lot and they’re up 500 a unit. Okay, 500 a unit between the front and the back. Put that on your calculator on five, 600 units a month and times that by a year and ask yourself, do you want this extra gross on your statement?

Jim Fitzpatrick:
That’s exactly right. And all it is, is just changing the mindset of the dealership to say, “Yes, we can make gross profits, but we first have to train our sales people to do that.” And managers as well, right?

Sean Gardner:
You just said it yourself, and this has been around for a long time and it’s still there, gross is a state of mind.

Jim Fitzpatrick:
100% correct.

Sean Gardner:
You either believe you can or can’t and you’ll be right. That’s what Henry Ford said, right?

Jim Fitzpatrick:
That’s right. Right.

Sean Gardner:
So you’ve got to believe you can do it and if you believe you can do it, you’ve got to develop the skills to be able to do it. Okay, there is a way to present numbers and maximize gross profit on a car deal and still give the customer the rollout, the red carpet, phenomenal world-class experience. As a matter of fact, if we handle initial price questions better and close on value and set up the negotiations better, your Google reviews shoot up because the customer is having a better buying experience.

Jim Fitzpatrick:
That’s exactly right. That’s exactly right. Well folks, now you know why he’s one of the top trainers in the country working for the Joe Verde Group.

Sean Gardner:
Thank you.

Jim Fitzpatrick:
Sean Gardner, I want to thank you so much.

Sean Gardner:
No, Jim, it’s an honor.

Jim Fitzpatrick:
It is always a pleasure.

Sean Gardner:
Man, I love doing this. I really do.

Jim Fitzpatrick:
I know, but you’re great at what you do and hopefully dealers are listening to you. I love your passion by the way because it is a mindset and dealers in 2020 need to wake up and smell the coffee and go, “What are we doing? Why are we in the business of giving cars away?” That’s not what got any dealer into the business, right?

Sean Gardner:
That’s right.

Jim Fitzpatrick:
And it starts and ends with training.

Sean Gardner:
Yeah, yeah.

Jim Fitzpatrick:
So thank you so much for doing this.

Sean Gardner:
No. Hey, thank you and I hope to see you guys soon.

Jim Fitzpatrick:
Great.

Sean Gardner:
Thank you, Jim.

Jim Fitzpatrick:
Thanks.

Sean Gardner:
All right.

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