There is a lot of talk today about speeding up the sales process. Even with all the improvements the automotive industry has seen over the last few years, the average consumer still does not like the current sales and transaction process and they believe it takes way too long. One thing that can be changed immediately to speed up the sales process and make the process more transparent to the customer is the way you handle trade-ins.
The majority of customers trade their current vehicle into the dealership when purchasing a new vehicle. In most dealerships, the trade-in part of the process comes towards the end of the sales process.
In today’s market the customer may have done their investigation online before ever contacting you and often have looked up possible market values on their trade-in for an idea of what their vehicle is worth. Next, a salesperson assists the customer in picking out a vehicle if they have not already done so and then presents and demonstrates the vehicle when they arrive at the dealership. It’s only after those steps are done that most salespeople address the trade-in. Notice it’s towards the end of the sales process that a salesperson then has a manager do a physical appraisal. I think this is a big mistake and let me explain why.
The customer will spend the majority of their life in three places – Home, Work or Vehicle. Because of the time spent by the customers in these areas, these are comfort zones for the customer. And, the customer brings one of those comfort zones to you! So why would you not utilize a comfort zone of the customer? I think in the digital age, bringing the trade-in to the front of the process is even more important because it shows transparency and gains trust with the customer.
In this updated sales process, after you have begun to build some in- person rapport and you are asking questions of the customer to build even a better customer and buying profile, I suggest you move to the trade-in first before you even look at the car they are considering.
As you are talking with your customer, I invite you to say the following, “Mr. Customer, before we go take a look at the vehicle you are interested in, I want to walk over to your current vehicle for two reasons. First, I want to verify the serial number and get a complete description of the vehicle. The reason is, the management will input the information to some web-based software that searches for several hundred miles for the most comparable vehicles for you and it will provide you with the real time market value of your vehicle and this will save you a lot of time! Secondly, as I get the information, with your permission, I would like to ask you a couple of questions. Question such as, what do you like most about the vehicle that you want on the new vehicle and what you may not like on the vehicle that you would like to eliminate on your new vehicle. Also, what may have changed since you bought your last vehicle that might influence you in your decision this time? Mr. Customer, this often gives me ideas that can save you money!
This amounts to a trade-in evaluation, not a trade-in appraisal, at this point. The dealership might decide to share a specific trade-in value, or range of values, with the customer right now, but that is an option. Other dealerships might opt to inform the customer why they are looking at the existing vehicle, and how and why the related information will be entered into software, and leave it at that.
Let’s take a look at why this is a fantastic improvement over the usual sales process.
- You are taking the customer to their comfort zone.
- You are letting the customer know that you are addressing their issues and fears right up front and providing a feeling of transparency.
- You are using anchoring phrases of “saving time and saving money.”
- Every customer wants those two things and as mentioned earlier, most customers dread the shopping and buying process because they believe it takes way too long.
- You now are addressing this issue head on to create a proactive approach.
- You will create better rapport, which should lead to a better relationship.
- You are getting a better profile of the customer to assist you in landing the customer on the right vehicle.
- You will have better information that may provide you ideas for alternatives the customer might like.
- You will slow the customer down, which in the end will speed up the process.
- If you have to negotiate, you will have better information to provide value and to “raise negotiations to higher level issue of value” beyond money.
- You are letting the customer know that whatever tool they may have used for an online approximate trade value, that you have online tools that compare all vehicles in the market for several hundred miles that provides “The most accurate real-time market value of their vehicle.”
- You will be able to ask more questions up front before presenting the vehicle to give a more tailored presentation rather than a one-size-fits all product presentation.
- You will spend better time with a customer up front that will create rapport, relationship and trust.
- You are creating “Cognitive Disassociation” that will separate you from other car dealers and salespeople as well as their practices.
- You will create the opportunity to effectively present your SDP – (Specific Defining Proposition) – What makes you, your dealership and vehicle the unique and better choice.
- You are creating “A category of one!”
As prices have become readily available online, it has taken the mystery out of pricing in regards to a new car purchase. For most dealerships this has created gross profit compression. Your profits are being squeezed at every angle.
The trade-in is a negotiable item. You are providing a service on taking the trade-in verses the customer having to sell their vehicle on their own. Because of this, it is ethical and moral as well as good business practice to take the trade-in at a wholesale value. Customers simply look at the highest value available on the Internet and may not understand this. If you watch the TV show “Pawn Stars” the owner of the shop does a great job of explaining this to customers and he has no issues in giving it to them straight!
Somehow, in dealerships we have become afraid to share with the customer why they are getting the trade-in values they are receiving. By addressing the issue of trade in up front, you will greatly lessen this usual point of contention with trade values with the customer. I want to be clear, you are addressing the issue up front, not necessarily giving them the trade-in value at this point, unless that is your dealerships philosophy.
If you will segue to the trade-in up front in the process, you will create a cleaner, more up-to-date and transparent feeling process to your customer while allowing you to differentiate yourself and provide better value. By doing so, you will actually speed up the overall transaction in the long run by slowing it down in the beginning. In the Internet age, many are preaching for a quicker sales and buying process. However, they are often missing the point by trying to create a transactional process. As you move to make your sales process quicker and more transparent, do not forget that your mission should be to make the shopping and buying process “Transformational, not transactional!” Utilizing the trade-in properly will allow you to modernize your process while creating a “Wow” experience for your customer. At this point, people still buy from people. Do everything you can to make you better as you better the process and experience!