Root Canal or Deal Negotiation?
- Customers have long been disenchanted with the car buying process.
- Process execution is at the root of the problem.
I’ll come right out and say it – customers are disenchanted with the car buying process.
I know, I know… “Thanks, Captain Obvious.”
But it’s a serious issue, and it’s one that spans generations. Roughly 25% of Gen Xers say they would rather battle a root canal than negotiate with a car dealer. Think about that… a root canal. Similarly, 56% of millennials say they feel salespeople pressure them into buying something right away. How did we possibly let the car buying process get so painful that consumers would rather have a dental procedure than visit a dealership? Upon close inspection, it’s easy to see the problem is rooted in the execution of the process rather than the core process itself.
To start, salespeople are often limited to approaching customers completely cold or waiting for the customer to make the first move. They can’t proactively jump on a good opportunity because identifying those opportunities requires detailed information beyond a customer’s name and phone number. This leads to customers reacting to most sales interactions defensively, reducing their willingness to buy.
Deeper in the buying process, the typical execution of deal negotiation rubs customers the wrong way. Salespeople spend too much time away from the customer to counteract their lingering feelings of pressure and expectation. Whether they’re at the desk talking over deal points with the sales manager or in transit to/from the desk, the customer is left alone.
An unattended customer is a wild card. Are they shopping your competition? Are they venting to their friends via text? Are they drafting their Google review? Or maybe they’re just sitting there in silence while dealership stereotypes and horror stories swirl around in their head? There’s no way for the salesperson to manage the sales cycle AND the customer’s experience when they aren’t with the customer.
All that to say – the average salesperson is woefully under equipped to effectively manage all aspects of the buying experience.
Luckily, technology is growing and improving to meet these challenges head on.
New solutions are addressing customer pain points by giving your salespeople what they need to manage the buying process – from first contact with the dealership, to negotiations, to signing the deal. Allow me to paint a picture of what this looks like:
- An indicator in the customer profile visually shows an equity estimate on the customer’s current vehicle, indicating to the salesperson that the repeat customer has positive equity in their potential trade.
- After settling on a vehicle with the customer, the salesperson skips the “leaving their customer” part of the traditional negotiation process by electronically sending the sales manager key details to start the process.
- These details lead to a strategic first pencil created specifically for the customer using the details gathered like the finance and payment options they’re looking for and the ballpark trade value based on the equity estimate.
- From there, the sales manager starts a deal based on what the customer is looking for, rather than a pre-set payment option matrix. All the while, the salesperson is present with the customer and available to discuss the vehicle or answer questions about the process.
- Once the sales manager electronically sends the deal back, the salesperson easily presents the payment options on their tablet or computer where the customer accepts or revises the options and electronically sends additional details back to the sales manager.
- The process continues until a deal is settled on, with the salesperson staying present with the consumer, transparently sharing updates and information about the vehicle and deal options. The process is faster, transparent, and streamlined for everyone involved.
CRM technology is being redefined to alleviate some of the tension between you and your customers. This new workflow not only speeds up the sales process, but helps increase repeat buyers and gives the customer a sense of control, ensuring they aren’t left alone while the salesperson runs back and forth from them to the sales manager to negotiate the deal. Furthermore, the most cutting edge CRM technology is allowing the process to expand beyond the four walls of the dealership without sacrificing control or profitability.
To learn more about what else is being done to redefine CRM, read this article about how a redefined CRM can be used to improve teamwork between sales and service departments, deliver better customer service, and increase customer retention.
Industry experts are predicting that used vehicle demand (and prices) likely won’t start coming down until spring 2022 at the earliest.