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March 05, 2001 16:31:50
Negotiating The Path to the Sale

Ted Rubin
President of DealerUps, Inc.

“If you don't know where you are going, when you get there, you won't even know that you are there.” This slightly altered Chinese proverb has been a mantra of mine for some time. I believe it holds great truth, especially with regard to the way that most dealerships have been managing negotiations with their customers.

Now more than ever before, managers can find themselves at a disadvantage in negotiations with customers, even before the negotiations have begun. This is partially due to the amount of information that is available to today's customers. The Internet and automotive publications like Blue Book, Black Book and Edmunds, have really fortified the consumer with knowledge of the bottom line.

But many times, it is not someone else's numbers that we are trying to beat when that customer walks in the door. It's our own. In most dealerships, there is no way for a sales manager to know if a customer has been quoted a price, or even contacted the dealership before their entry as a “new floor up”, unless the customer specifically identifies themself. Even then, it is difficult to know what negotiations have already transpired with the customer, if the representative who made contact is not available.

You may already have reached your negotiation destination, and not know it if you don't know what your customer has already been told! One of the biggest mistakes a manager can make is not knowing when to stop negotiating. This is why it is imperative that dealers use some sort of tracking method at the sales desk.

If you are the average dealer, most likely you are using the age old, standard, paper desk log. You use it to log all of the floor traffic that has been brought to the desk. And, at the end of each day, you neatly file it away with those of days before, never to be used, or even seen again. All that information, all written down and documented. For what? The way it sits, it's about as useful as the perforated pinhole margins that you tear off each F&I contract and toss in the garbage.

In comes the computer. Nothing to be afraid of, although in some dealerships, men and women run screaming while clutching their post-it notes and legal pads, from a person who would use such vulgar language. Amazingly, there are more tools and utilities available to dealerships than ever before, tools that enhance both the customer experience and the salesperson's ability to make the sale. And yet, many dealers are reluctant to take advantage because they fear technology.

One such tool that can bring great value to your dealership is some type of electronic desk log. There are products that are available for use over the Internet, as well as those that reside on a local system. If you are so inclined, you can even create your own, in-house. The key is to get this very valuable information into your computer so that it can be utilized.

If you are keeping any type of desk log at all, you are capturing valuable information about your customers every day. Every hour. Every time a customer makes the log. What brought them in? Where do they live? What is their trade? And, most importantly, what was the customer quoted?

This information can help you make sales now, and in the future. Utilize the information now to hold gross. Know where your customer has been, what he, or she, is looking for, and why they are here with you right now. Utilize the information in the future with direct mail and target your customers much more effectively. Or, track their historical expenditures to evaluate how to negotiate with them now.

You have been capturing some of the most valuable data about your customer base for years. Data so valuable that you may have even paid to get this same data from a third party company, because you haven't been able to organize what you have into a useful form. Today, not only do the tools exist to help you do this, but they will make you more effective because the data is coming directly from your own constituency.

Ted Rubin is President of DealerUps, Inc., a company dedicated to developing software solutions for dealerships that wish to increase their effectiveness through technology and process improvement. Ted has direct, and extensive experience in all facets of dealership sales and service management.



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