The best salespeople always find the right vehicle for their customers
Far from pushing options that customers might want, good upselling can go a long way to fostering long-term relationships and securing repeat business.
In automotive retailing, as with most businesses, there’s usually a constant need to look for
profitability. And given how competitive the car business has become, that increasingly requires more inventive and original approaches.
One area that’s traditionally been a focus for profit, concerns the vehicle upgrade process in the showroom. In the past, upselling was often viewed as perhaps pushing features and equipment on customers that they didn’t want, such as leather seating, air conditioning or premium radio.
Today, however, the landscape is quite different. Many new vehicle buyers have already done extensive research before they even set foot in the showroom, and the dealer’s role has become more about presenting options than describing the vehicle. Given the competitiveness of the industry and the incentives being offered by many vehicle manufacturers, balancing profitability with customer retention and satisfaction has become, in many respects an art form.
In this story, we talk to several successful dealers about upselling, how they view the process and why they believe that, if performed correctly it benefits both the dealer and the customer, especially over the longer term.
GET TO KNOW THY CUSTOMER
“A car or truck is a big financial investment for most people,” says Jim Williamson, dealer principal at Williamson Chrysler Dodge Jeep in Uxbridge, Ont. “So although price and budget are an important part of the purchase process, at least at the beginning, many customers want to make sure they’re happy with the vehicle, since in most cases they’ll be owning it for a long period of time.”
Jim Williamson, of Williamson Chrysler in Uxbridge, Ont. says putting customers into the no-frills, web-advertised vehicle doesn’t do a lot to enhance the overall shopping experience.
While Williamson acknowledges that manufacturers, including Chrysler have been heavily promoting budget specials, more often than not, he finds that such vehicles aren’t really what most consumers are looking for. “Let’s say there’s an online promotion for a Dodge Grand Caravan SE at $19,995. If the customer walks through the door, you show them this base model van, which doesn’t have Stow ‘n’ Go seating, tinted glass or DVD and you say which colour would you like? Red, black or silver, you haven’t helped the customer and you haven’t helped yourself.”
Williamson says that it’s important for dealers and their sales staff to understand the customers’ needs and requirements. “Everybody’s different,” he says. “While some might walk in determined to get a vehicle for a set price, once you start engaging in the conversation, both parties often discover that the vehicle in question might not be the right one. You have to present options.”
LISTEN CAREFULLY
Wayne Feasby, operations manager at Williamson says that the best sales consultant is also the best listener. He also says that a key to selling upgrades is often in the way they are presented. “A specific promotion might have gotten them through the door,” he says “but once they’re in the store it’s your job to match the customer to the right vehicle. Engage with them, ask them what kind of driving they do, if they have kids, if they’re self-employed, if they have a lot of stuff to haul around or if they’re just looking for a weekend toy. From that you can then present options and features that are most likely to appeal to them.”
At Hillcrest Volkswagen in Halifax, Mike Currie, says some customers will already have a notion of what upgrades or features they want before stepping into the showroom.
In fact, in some cases the type of customer can often reflect on the options or upgrades they’ll likely pre-consider. Mike Currie, general sales manager at Hillcrest Volkswagen in Halifax, N.S., says that many customers looking to buy Golf or Jetta TDIs tend to cover high mileage with their vehicles, so extended warranty is almost a prerequisite.
“They’ve essentially factored that in even before they’ve stepped foot in the showroom,” he says, “so it’s already going to be a part of the sales and vehicle selection process.” Currie also says that some other options are popular across the board. “Volkswagen’s cold weather package, which adds heated windshield washer nozzles and front seats is hugely popular. It’s a $275 upgrade and one many customers see the value in having because it adds comfort and convenience, especially during cold winter mornings.”
PERCEIVED VALUE
Which brings up an interesting point. Whenever a customer sees the value in an option or feature, they’re more likely than not to take it. Out in British Columbia, Brad Trotman of the Trotman Auto Group sees a similar scenario with UConnect hands-free technology. It’s not standard on many Chrysler vehicles, yet TAG’s flagship store, Langley Chrysler orders a lot of cars, vans and trucks with it.
For the Trotman Automotive Group, the objective is to bring value and satisfaction to customers. “We aren’t focused on how many options we can add, but providing customers with the features they want,” say brothers Brad and Mike Trotman. Mike is front and centre in this group photo, Brad slightly behind and to the right of Mike.
“Many of us need or want to stay connected today,” Trotman says “and that includes when we’re in our vehicles. Because of legal and safety requirements we can’t hold our phones when we drive, so hands-free has become essential. The UConnect option might cost $750 but the majority of customers will consider it.”
Another area where savvy dealers are seeing potential for upgrades is through factory authorized accessories, though some readily admit they have barely scratched the surface.
Mike Trotman, Brad’s brother and CEO of Trotman Automotive Group, says that in many respects, motorists today often view their vehicles as an extension of themselves, much like their smartphones. “Think about it,” he says, “most of us have some customized element to our phones, whether it’s a unique case or perhaps a unique ring tone. It says something about our character and our personality. Vehicles are often viewed in much the same way.”
He refers to the group’s in-house accessory shop, TAG Customs where buyers can add any number of upgrades, from bug deflectors and tonneau covers on trucks, to suspension lift kits, replacement wheels and tires, spotlights and exhaust systems. With enthusiast customers, especially those into muscle cars, or off-roading, accessories are the norm rather than the exception, he says.
At TAG Customs, customers can choose to have the parts installed and in many cases maintain the vehicle’s original factory warranty, an advantage over many aftermarket vendors. However, both Brad and Mike state that while each individual accessory adds to the overall cost of the vehicle purchase, the purpose behind TAG Customs isn’t to max out the profit on each vehicle sold.
“We aren’t focused on how many options and parts we can add,” says Brad, “it’s about providing customers with what they want. If the customer is happy, regardless of what they have spent with us, then we’ve done our job. We want to make the sales experience fun and enjoyable. Buying a car is a huge commitment for most people and it’s an emotional experience, so why not make it a good one?” he says.
If you do, chances are they’ll come back again. “Remember, when consumers are buying and or financing a vehicle, it’s likely going to be with them for a long time. And put into that context, you have to think if you would rather save a few hundred dollars a month and stick with the no frills base model or spend a little more and get the options you want, especially when you’re going to be in that vehicle day in and day out for three years or more. What ultimately is going to leave you more satisfied? It’s a bit like walking into Starbucks and just ordering a plain black coffee, are you really going to be happy with it?”
FINANCE AND INSURANCE
As part of the sales process, F&I can be a huge asset or a handicap for dealers.
Often, problems stem from not identifying the business office as an integral part of the purchase.
Alexis Rietze, who works as a business manager for the Williamson group has been in the industry for eight years and she says that the F&I experience differs from dealer to dealer.
“Based on my own experiences, the successful stores are ones that approach the process one
customer at a time. If your focus is to simply do as many deals as possible and sell as many products, you’re not going to last in the industry, especially because information travels so fast.”
She cites the fact that the Internet and social media have become an increasingly important method of communication and a good or negative customer experience can be quickly passed on.
MAKE IT PERSONAL
She also says that for customers, being in the business office is also a very personal part of the sales process, so it’s important for F&I managers to not be pushy and try and ensure a professional yet relaxing experience.
“You’re asking customers for information on how much they earn, what their liabilities are, very personal things. If they can trust you with that information it not only makes the process go more smoothly but they’re also likely to be more open to options or products and more likely to return to the dealership for future purchases.”
She says that depending on the customer, certain options available through the business office such as rust protection, paint protection and insurance can prove more popular than others.
“Many of our customers specify rust protection, to guard their new vehicles from salt and winter conditions, while for those who buy specialty cars like Dodge Challengers and Chargers, paint protection is important because they want their car to look good.”
Although insurance products are not generally as popular, they can be seen as a significant value to some customers. “We had one customer who was financing a rather large loan through us for his vehicle purchase. He had a family and he felt that should something happen to him he didn’t want them to be burdened with the obligation, so we agreed on a life insurance package. It really is a case of getting to know your customer.”
