Can You Win the Race to the Bottom? - AutoSuccessOnline

Can You Win the Race to the Bottom?

When cost is the only concern, dealerships don’t build relationships with their clients; they are simply taking orders.

How Sales Professionals Maintain Gross While Serving Their Customers

Many people employed in the sales profession — and most customers — believe that price is the most critical factor when making a purchase, especially when it comes to big-ticket items like vehicles. While the price of a vehicle is a significant part of the transaction, the most successful sales professionals understand that there’s a far more vital element: building value. 

In simplest terms, my Theory of 5 mentors and I have found that the perceived value of a product or service is crucial. When the product or service’s value becomes higher than its price, the customer comes away from the completed transaction enthusiastic, knowing that they have made the right decision. 

This mindset differs from the traditional sales attitude, where the price tag is the main — and sometimes the only — consideration. When price takes center stage, there is a “race to the bottom” with the competition, and this is a race that no one wins. Since only one company can have the lowest price, the competition becomes fierce. Gross profit is slashed for the dealership because of discounts, giveaways, gimmicks and other activities that lower — or appear to lower — the price. 

Unfortunately, there’s an unintentional negative side effect of this strategy. While these companies are racing to the bottom on price, they are also lowering the perceived value. The product, the salesperson and the dealership all become secondary to the price tag. When cost is the only concern, the vehicle becomes a commodity that is no different from the competition’s inventory. These dealerships don’t build relationships with their clients; they are simply taking orders.

The most successful sales professionals know that there’s a better way. Instead of driving down the price as low as possible, they increase the value of the vehicle, the service their dealership provides and the trust they create in their clients’ minds.

So, how can we change the focus from price to value in our customer’s eyes? 

3 Steps for Building Value

1. Listen to the Customer — When dealerships race to the bottom, volume is everything. They are trying to sell vehicles quickly, and they don’t understand — or care — that those products aren’t the best fit for the customer standing in front of them. They focus only on moving the metal. 

When sales professionals build value, we first take the time to create a relationship with the client and learn about their unique situation and needs. For this, we must ask questions and listen to the answers. To gather this information and build a rapport with our guests, we should ask open-ended questions (“Who,” “What,” “When,” “Where,” “Why” and “How,” rather than “Yes” and “No”) and enter into a discussion with them. 

2. Understand What They Need — By giving them our undivided attention, we show that we are interested and care about them as individuals and not as “potential income,” and that we are there to answer their questions and provide all their transportation needs. We should take the information we gather and summarize it back to them often to show that we understand and care what’s important to them. This personalized presentation goes a long way toward building the value in the services we are providing.   

When we focus our guests’ wants and needs — and they know we understand them — we earn their trust, and they’ll see us as their advocate in this process, rather than their opponent. We’ll be able to share with them the best options for vehicles based on their desires and situation, and they’ll see how our dealership will serve them long after they purchase the vehicle. 

3. Keep It Simple — There’s a temptation to use industry jargon and drown the customer with facts and figures to demonstrate how “professional” we are. However, the great sales professionals know that confusing their guests doesn’t build value; it disengages them from the process. We are there to assist them in finding the right vehicle for them, and we do that with a simple, personalized presentation. Some customers will want to discuss the finer points of a vehicle (horsepower, torque, displacement and any other mechanical features). Others will only require basic information. Our presentation should be custom-made for the guest we are with at that moment. Being overly complicated doesn’t build credibility; it builds walls. 

What the Customer Truly Wants

If asked, most customers will say they want the lowest price when choosing a vehicle. The reality is that they want the best value. As sales professionals, it’s up to us to make the case that we are their sales professional whose goal is to assist them in this major purchase. If we present ourselves, our product and our dealership correctly, not only will we make the sale today, but we’ll create customers for life.

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