"The Selling Appraisal"
 Today let's look at the challenges we face when our customers have a trade-in. For instance, do they think their vehicle is worth more or less than it really is? Do they justify their position with information from the internet or from another outside source like their banker? Are you tired of feeling like you are on the defensive in negotiations about the trade-in? Let's look at a few strategies for managing the customer's perceptions and get them more realistic in their thinking.
Include their vehicle in your “Discovery Process”
One of the keys to making a sale is to slow the customer down in the beginning of the sales process so that you can begin to establish rapport and discover their buying motives. A great way to do this is to use their current vehicle for questions. This will help you to slow the customer down and you will learn some of their hot buttons for purchasing a new or pre-owned vehicle. Here are some things you might ask:
- What year model is your vehicle?
- Did you purchase it new or used?
- What do you like best about your vehicle?
- If you could change or improve one thing about it, what would it be?
- Will your driving habits be about the same or have they changed?
These will get you started. Take a few minutes and write out a few more of your own. By focusing on their trade-in you are able to show a true interest in the customer and slow things down so you can add value throughout your sales process. A word of caution though. One thing you never want to ask is what they think their vehicle is worth. They will give you a ridiculous number and then spend the next two hours defending it! Just begin positioning yourself for presenting “Fair Market Value” to them when the time comes.
Plant “Seeds of Doubt”
Part of our job as salespeople is to manage the customer's perceptions. If we don't begin to at least chip away at their confidence about their trade value, it will be much tougher to negotiate successfully when we get inside the dealership. Try making a statement like:
- “We've been seeing a lot of these traded in lately.”
This will be one of the first seeds you plant to lower their thinking. Market values are determined partly by supply and demand. If the supply is rising the values are falling. Don't get into an argument with the customer here, just plant a seed and then move on with another question. Also mention to them that you will be coming back to their vehicle later so that together you can do a more thorough evaluation of the condition.
The “Selling Appraisal”
Prior to actually having your manager appraise the customer's trade-in, you want to evaluate the vehicle with the customer. Take your appraisal form or even a small spiral notebook and go with the customer to their vehicle. Begin to walk around the vehicle and make notes about:
- The overall condition
- Small dings or repairs needed to the exterior
- Stains or tears in the interior
- Stars or cracks in the windshield
- Tire tread depth
You get the idea. Just make a few notes and say “hmmm”. Don't criticize their trade in! You just want to lower their sights from the “perfect” car they will describe to you if you skip this step. Also, get them involved in this process:
• How about reading the miles to me. (Tip: If they are high, have them repeat it to reinforce that message)
• Go ahead and get your registration out of the glove compartment.
• Oh, we'll need your insurance card too.
Each of these small actions is a minor commitment that moves the customer closer to the sale of your vehicle. Think about it, if you sit down inside with a customer with realistic expectations about their vehicle, their insurance card and registration are you in pretty good shape for the sale?
Note the Improvements
When you do the Selling Appraisal one of the things that will happen is that the customer will begin to tell you about all of the money they have spent on the car. In their minds, they are raising the value. In the last year a typical customer may have:
- Put two new tires on $200
- Serviced the transmission $200
- Replaced the battery $50
- Replaced the alternator $150
You should list all of these things. In fact, encourage them to tell you more. Once they have finished say: “You know it's great you take such care of your vehicle. Now those are maintenance items so we really can't add to the value for them. However if you hadn't done them, we would have to and I'd have to deduct for it so it's great you have maintained your vehicle. By the way, would you like something cold to drink or maybe some coffee while we wrap things up?” This is a direct but soft way of letting them know that the $600 isn't increasing the value but it does maintain it.
Tip: When you are inside and the customer says the payment is $50 per month too high, guess what you now have as an extra closing tool? That's right, the maintenance close. (Take that $600 they've spent in the last year, divide by 12 and you've found an extra $50 in their budget to help pay for the new vehicle.)
Present “Fair Market Value”
Do you ever get that funny feeling in your stomach when it's time to present the numbers to a customer because you think they'll object? Let's face it, most of the time they will. But if you'll follow the steps I've outlined, it will give you more confidence when you do present them. It will also give you the ability to justify your position in the negotiation instead of simply accepting theirs and saying “So if I can get you that will you go ahead?”
Tip: In a negotiation stop writing their first offer. Instead, justify your position, raise them as much as you can, then write that number and get a commitment from the customer before you go back to your manager. You'll see your sales and profits go up considerably.
Putting it into practice
Some of you are already using these steps to position your negotiations. Help the other members of your team to use them too. The more vehicles your dealership sells overall the better it is for everyone. If you haven't been using these steps, start using them immediately and take 20 minutes every day to practice them. You'll make some mistakes but if you are serious about getting better, you'll improve a little each time. In our classes we break these steps down in detail and stores get dramatic results when they use them.
Give me a call at 877-651-1032 or e-mail me at jimmy_atkinson@assurant.com and let me know how much of an impact these key steps are having for you |
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