Auto Dealer Monthly Magazine is the daily operations publication serving the retail automotive industry. This automotive publication serves dealer principals, officers and general managers with the latest best practices.
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industry expert / special finance Please follow me inside and we can get you quickly pre-ap- proved." (The customer is RB; proceed with the traditional SF sales process.) You can certainly ask different questions. One such would be, "Mr. Jones, would you like our assistance to help find you competitive financing or leas- ing options on this purchase?" "Yes." "No problem, we will be happy to. Let me ask you, on a scale of one to five, five being great (not good, but great), how would you rate your credit?" If they reply a five, work them as a GB. One through four, RB. From here, in some stores the RB means turning over the customer to the special finance sales team or depart- ment. In others, it will mean bringing them inside to begin the finance loop and privately discuss their credit back- ground. Ultimately, with the SF customer, it means that the focus shifts to qualifying for financing rather than looking at a specific vehicle. By doing so, it will mean that SF customers are much less likely to be shown vehicles that they cannot qualify for, meaning the dealership will have a much better opportunity to deliver a vehicle, and the sales process for these customers will pro- vide a much more positive buying experience. Some people have a hard time with this thought process. They feel that asking any credit-qualifying questions will offend GB customers. I will tell you that it was my single biggest leap of faith in the car business (more so than buying my first new car store). After spending six weeks training my team in late 1989, I had more than a little trepidation when I took the first up to show the team how to do it. Naturally, it was a wealthy farmer (and existing cus- tomer) who immediately told me he didn't need help with financing and that he could buy the store "twice over with cash money." Green balloon! He bought his wife a new Buick, incidentally. That occurred in January 1990. I assure you that even the RB customers value their time. The last thing they want is to be worked on a vehicle that they cannot qualify for, and then be strung along for a week while the finance man- ager tries to create a miracle. If a deal could have taken place, after that long it won't, and the customer will not be happy. Remember, new car dealers' CSI is only measured on those customers who actually purchase a car. Those who go through the wrong process are still not happy, only you won't be sending them a survey. They will tell their friends about their experience, however. A GB will not be offended by inoffensive questions. Indeed, they will puff out their chests and proudly proclaim, "I am paying cash," or, "My credit is perfect!" With them, you can just stroll right on down the road to the sale. Commissioned salespeople are often reluctant to change the way they do business. They are not comfortable and tend to regress to their old habits after a failed attempt or two. Additionally, some com- pensation plans effectively penalize the salesperson or sales manager if the deal winds up going to SF. (Not a good thing, but that is another article.) The salesperson ultimately works the deal conventionally, either out of fear or because they feel they won't be compensated justly if it goes SF, and as a result, they blow up more deals than they sell. The other derailment is when a salesperson accomplishes identifying the RB successfully, but the sales or finance desk doesn't know how to use the information. They mistakenly think all they have to do is to work payments based on shorter term and high interest rates and everything else will fall into place. That doesn't work either, as the finance office has no room to deduct the acquisition fee, the deal becomes over-advanced, or there is insufficient equity to allow the deal to take place. The only way to overcome the obstacles created by the indifference or ignorance of a salesperson or sales manager is through strong, consistent and repetitive training of all parties. Salespeople, sales managers, finance managers and SF managers need to be educated as to what needs to take place, when it should take place and how it will be executed. Follow that up by measuring the results (mea- sure how many RBs are identified and worked as SF before they are shown a vehicle, and how many are delivered), which allows you to manage the progress as well. These are basic systems and processes. The metaphor of using green balloons and red balloons (yes, it is a metaphor; a dealer once thought I was serious about actually handing out balloons) may seem simple and childish to some, but for those who understand how important these qualifying steps are to a special finance department, it can turn the sales process into child's play. Skip the helium tank, and until next month, Good Selling! 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