Looking behind the scenes of sales organizations,,,a continuing series...
The other day, I was sitting, enjoying a beverage, when the person next to me started to go off. They began by telling everyone within earshot what a "rip off house" the car dealer he was at earlier was. He went off about the pressure, the lack of money for his trade, the more than 0% interest rate and a whole host of complaints. With the long list of complaints, it was hard to see how this dealer ever sold a car. But this person's frustrations were not unique. Nor was it unique to complain about this car dealer as opposed to all car dealers. All sales organizations for that matter. People just hate salespeople. Is that justified? Are salespeople just bottom feeding whores who are just looking to empty your wallet? Well, yes and no. Many things happen in all business that might fall below our personal ethical codes, but if you understand the relationships and processes of a sales organization, you can get beyond the frustration and work towards getting the deal you want.
A long time ago, I entered the field of sales. Since then, I have sold cars, big ticket electronics, other big ticket luxuries and have done some business to business sales as well. I have been on the floor and in the manager's chair. Over the years, I have learned a lot about the selling process, what goes on behind the scenes and why some people have misconceptions about sales and the people who do it for a living.
Most people see salespeople as leeches or worse. Their impression is that the salesperson wants to slam them into a vehicle or product and get rid of them as soon as possible. Is that true? Well, yes and no. They are there to make a living. But many of the tactics that seem sleazy to you are just the normal process of the dealer, and often times, while cold and numbers driven, aren't as "dishonest" as we want to make them out to be. Their job is to get the most for a product. Your job is to getthe best price you can. What the salesperson and manager are doing is no more dishonest than your motives when trying to buy a big item like a car. In fact, over the years, I've seen bigger liars in customers than in most of the managers and almost all the salespeople I have worked with over the years. Getting top dollar for a car doesn't make them liars, it makes them good at their job.
Most salespeople who have lasted more than 6 months in the business last because on one hand, they have proven they can at least carry their weight and aren't costing the company money to keep them around. the next most important reason they are still there is because they have decided to put up with the sales manager or whoever is responsible for driving the salesforce and motivating them.
And the biggest motivator in sales is money. So, if the salesperson is still working there, that means that the money is good enough that they are willing to put up with both the treatment from their supervisor, but also that the customers aren't giving that person enough grief to leave. Of course, insiders know that a salesforce inevitably has a lot of hard luck stories on it's staff. Most people don't grow up wanting to sell cars or anything retail. The pay can be good, but on the whole, the hours stink, the management stinks and generally is clueless on how to motivate a staff in other ways than throwing money at saleseople.
Most of the salespeople in the car business have better educations, better bases of experience and if objectively looked at, in many cases are more qualified to be the supervisor than the supervisor is. Then why is the supervisor in charge? Simple. THe sales managers in a car dealership are the people who would sell their mother for the right deal. Not in a dishonest manner, but in a very cold one. All the grief that gets passed on to salespeople is usually more properly geared at the manager.
What people who have not spent much time behind the scenes in sales don't realize is that salespeople are trying to make a living. On the whole, they try to do it as honestly as possible often working more for the customer than the customer realizes. Good salepeople know that ruining your reputation as a reputable salesperson isn't worth it for 1 sale. Salespeople rely on referrals and good mentions of them to make a living sometimes more than they do the dealerships advertising efforts. Salespeople in most dealerships, tho not technically, are essentially an independent contractor working for themself and representing the dealer. I can't remember how many times I went into a sales manager's office fighting for a customer to be treated fairly to be shrugged off and told to "blow em out the door" or some comment indicating that they had no interest in even concerning themselves with the customer complaint or issue. Sales managers very purposefully distance themselves from the process in order to maintain a certain coldness and lack of responsibility. As long as the salesperson is forced to deal with the customer, the manager doesn't have to and can concentrate on maximizing profits. Human personalities only complicate that issue.
The only times a manager wants to get involved is when they see a close and can "show the salesperson up." When a manager goes in and closes a sale for them, that gives the manager cause to call the salesperson "weak" for the forseeable future and pick on them. This to managers is a "motivational tool." Indeed, it is a tradition passed on from manager to manager. Going in and closing a sale lets the manager point out to the salesperson that they "know how it's done" and the salesperson would be best off listening to them. When they have that control from the salesperson, they can then send them back in the box and be confident that the salesperson will parrot exactly what they told them to say.
In doing it this way, the manager can feed the salesperson lines that they don't have the balls to say. They can effectively force the salesperson to go in and argue that their trade really is only worth 500 bucks when the blue book says it's worth four grand. The manager knows that if he goes in himself, he will be raising his trade amount as his concience will take over in many cases. In some cases, the trade is only worth 500. On the other hand, I submit that I have seen as many people unreasonably trying to get "all the money" for their worthless trade as I have seen managers try to steal cars effectively thru the "Cyrrano" techniques that he uses with the salesperson.
So, what can you do to ensure that you get that manager's attention and aren't fruitlessly fighting with a salesperson? Get them involved, early and often. No, don't walk in to a dealership and demand the manager's attention after being approached with a "can I help you" from some young eager salesperson. But as soon as any numbers are discussed, insist on going overthem with the manager only, face to face. That process will be resisted. The salesperson may explain that their process is for the salesperson to put together the numbers and the manager to get involved later, for whatever reason is given. Even if you demand it and send the salesperson over to get the manager, he may come back alone. He will explain that the manager is tied up with other business, like annother customer. This may be true, but then again it may not be.
Sales managers are notoriously lazy. Unless he has to, and he feels he has to, he will rarely leave his office or "tower" seat to get involved in a sale that isn't ready to close. The exception to that will be to "evaluate" a trade which is code for seeing how much they can knock it down. But we'll cover trades down the road. For now, just know that the manager will do everything he can to avoid any meaninful negotiations with you unless you are "buying now."
But if you can get him involved, and manage to get out of there without signing a contract, you are ahead of the game. That contact with the sales manager will ensure a future, better offer from the dealer. The only exception to that may be in a no haggle dealer, but even there, the trade is negotiable. Also, if it is a no haggle dealer, the trade might bring even more because of the higher margin in the car. But again, we'll discuss trade values in another article.
The reason you will be assured a better offer is that the manager, if he or she is a professional who knows how to sell, will personally keep track of the follow up. No longer are you just another "up" that the manager saw from a distance, but he has qualified you himself. If you can get a manager involved, know that if any numbers, especially interest rates are discussed, they will insist on you filling out a credit application before he commits to any rock bottom rate. This isn't as devious as it sounds.
1st off, it is not a good idea to put an application at every dealer you go to. Putting out gobs and gobs of credit applications will have you being inquired by not just the dealerships but they will instinctively send that application out to banks to try to get an approval. That approval will lead to a call to you telling you the good news and encouraging you to come in ASAP to sign and drive. But sending out scores of applications will eventually hurt your credit. If your credit is perfect or close to it, it won't matter much. But if you are a "bubble " customer, enough inquiries could lower your score enough to deny you a loan or an interest rate, which are tiered to your score.
But if you are serious about the car, and closer to a decision than just "looking around" go ahead and put it in. If you are qualified, the manager will make sure the salesperson pursues the customer until they "buy or die." This is a common term used in the sales business meaning follow up until the customer buys your product, another product and tells you so or is unreachable by all contact methods after many repeated tries at each. Many people try to "sneak in" a dealer, have as little contact with anyone as possible and expect to get a good deal. I can tell you fro experience, except in rare cases, this will result in you paying more. You will be the customer people throw numbers at until you just get tired of looking and buy. ANd research shows that these customers simply pay more because of their reluctance to actually negotiate. These aare the people who respond to the "come on in" ads expecting the deal of the century to jump in their lap. Unfortunately for them, the only way they will ever get past the advertised numbers is to invest the salesperson's and more importantly, the sales manager's time.
People who drive from lot to lot, refusing to get out of their cars and avoid any contact with a salesperson will inevitably fall for a come on type ad and end up paying more. Of course there are good tools, if used properly (which most don't) that can help ensure getting the right price. We will be covering the net and some other tools to gather info later in future articles.
If you were brave enough to fill out the application, the 1st call you get will be about your approval. If you left and left the dealership with the application they will call and hit you with the good news. IF you were deemed qualified while there, then the call will usually be the news of a lower rate or better payment option, such as a lease or an extended term. Sometimes the dealership is legitimately lowering your cost, sometimes they are just playing with the numbers. Carefully review any numbers and be clear on them before agreeing to return to the facility to buy the car. But your best move would be to politely decline in the end. At this point, whether you are speaking with the salesperson or manager, record the numbers honestly (one tip, never take fake numbers to another dealer to shop around with, they will smell it out in minutes, the cost of cars is their business, they see quotes from other dealers daily and have a good idea of what the competition is really doing) and tell them you are not ready to decide, for whatever reason. You will be met with solutions for your objections, some salespeople even keep rolodex style quick answer guides by their phone so no one can throw any surprises at them.
I won't tell you what to say, or to lie to the salesperson, that is your call. But I will say that "someone at the door" or someone on the other line is a quick way to get off the line. But whatever you choose, be quick about the explanation and don't give the salesperson a chance to respond, cause they will...offering to hold or call back in 5 minutes or any way they can come up with to extend the dialogue. When you decide it is time to take control from the dealer and end the conversation, do it in a way that people do when they are really in a hurry. Something like " I 'd really like to look at this closer but right now someone's banging on the door downstairs and I have to see what it is talk to you later bye." and hang up. Notice there were no commas in that statement. In other words,,,never pause before you say "bye" and when you do, hang up immediately.
If they call back quickly, unless you are ready to close, you are best off avoiding the phone for a little while. Make that salesperson go back to the manager and explain why the sale wasn't closed. The sales manager will ask the salesperson "what it would take" to close it. You are 1 step closer to getting a good deal.
Through the end of the month, that manager will be aware of you as a qualified customer who could be the difference between his bonus and no bonus. Many times in a dealership, the bonuses are worked for to the last minute of business and sometimes come down to 1 car or what happens on the last day. That is the position you want to be in when buying. We will discuss that in our next installment..
So far, you should understand the importance of getting the manager aware of your potential business. Of course, this will be ineffective if your credit is bad and you have no means to actually buy a car. If that is the cae, you will find yourself saying good bye to a lot of salespeople and managers who will return to their office and joke about the rat who doesn't have a pot to piss in trying to steal a car.
stay tuned...