The sixth in a series of articles detailing the Ten Critical Components for Success in Special Finance.

Every day, in nine out of 10 dealerships in the country, potential buyers (SF customers) are blown out of showrooms after an unsuspecting salesperson or desk manager allows a customer to select a vehicle, which in turn they present, sell and eventually close subject to terms they can never get approved in finance. I have witnessed this happen in some of the most successful and profitable dealerships in the country. There are many reasons it occurs, and many people realize that it occurs, yet most often it is allowed to continue.

Whether special finance is a separate department within a dealership or functions as part of a blended floor, perhaps the most important step in the special finance sales process is to be able to identify the SF customer at the onset of the sale, before the customer is shown (and sold) a vehicle.

The identification process is simple for those customers which the SF manager or department has attracted as leads, then contacted and set appointments to visit the dealership. The credit status of the customer has already been established, and once the customer arrives at the dealership, the sales process is already set. The sales team immediately moves into what I call the finance loop, where the customer completes a credit statement, a credit bureau is pulled and the combination is evaluated to see which finance companies’ programs are the best fit. Once that is determined, the desk can then suggest the most appropriate vehicles for the salesperson to show. This gives the dealership the best opportunity to structure a win-win-win deal.

Most sales teams have been taught a process involving the road to the sale. Depending on the source, it may involve seven steps, 10 steps, 11 or whatever. In most situations, they all work the same—starting with the meet and greet, investigating the needs and wants, and so on. When working with prime credit customers, this is tried and true and a very sound way of executing the sales process.

The problem occurs when the customer has subprime credit. In most stores in today’s market, that is over 50 percent of the time. That means more often than not, customers are being worked improperly.

I have frequently written in the past that it would be ideal if dealers could place a balloon kiosk in the customer parking area, and customers would be required to select one of two colored balloons to walk around the dealership with (either a green balloon for those with prime credit or a red balloon for those with subprime credit).

That would make the sales process so easy. It would help keep a salesperson from directing customers to and working deals on vehicles that the customer could never qualify for, nor afford. Red balloon (RB) customers would be identified immediately, and after the meet and greet, they would immediately be directed into the finance loop. With green balloon (GB) customers, nothing in the process would change from the tried and true.

The key, regardless of the department structure, is to insert a simple, non-offending qualifying question or two into your meet-and-greet process. These questions are simple. It can be as simple as asking, “Are you here for the big sale today? Great! Are you interested in our special insert the appropriate number] percent APR interest rate program for preferred credit customers?” (If the customer qualifies as GB, proceed with your traditional road to the sale.) If the answer is no, “Then would you be here to take advantage of our special financing programs to help you establish or re-establish credit? Great! Please follow me inside and we can get you quickly pre-approved.” (The customer is RB; proceed with the traditional SF sales process.)

You can certainly ask different questions. One such would be, “Mr. Jones, would you like our assistance to help find you competitive financing or leasing options on this purchase?”


“No problem, we will be happy to. Let me ask you, on a scale of one to five, five being great (not good, but great), how would you rate your credit?” If they reply a five, work them as a GB. One through four, RB.

From here, in some stores the RB means turning over the customer to the special finance sales team or department. In others, it will mean bringing them inside to begin the finance loop and privately discuss their credit background. Ultimately, with the SF customer, it means that the focus shifts to qualifying for financing rather than looking at a specific vehicle.

By doing so, it will mean that SF customers are much less likely to be shown vehicles that they cannot qualify for, meaning the dealership will have a much better opportunity to deliver a vehicle, and the sales process for these customers will provide a much more positive buying experience.

Some people have a hard time with this thought process. They feel that asking any credit-qualifying questions will offend GB customers. I will tell you that it was my single biggest leap of faith in the car business (more so than buying my first new car store). After spending six weeks training my team in late 1989, I had more than a little trepidation when I took the first up to show the team how to do it. Naturally, it was a wealthy farmer (and existing customer) who immediately told me he didn’t need help with financing and that he could buy the store “twice over with cash money.” Green balloon! He bought his wife a new Buick, incidentally.

That occurred in January 1990. I assure you that even the RB customers value their time. The last thing they want is to be worked on a vehicle that they cannot qualify for, and then be strung along for a week while the finance manager tries to create a miracle. If a deal could have taken place, after that long it won’t, and the customer will not be happy. Remember, new car dealers’ CSI is only measured on those customers who actually purchase a car. Those who go through the wrong process are still not happy, only you won’t be sending them a survey. They will tell their friends about their experience, however.

A GB will not be offended by inoffensive questions. Indeed, they will puff out their chests and proudly proclaim, “I am paying cash,” or, “My credit is perfect!” With them, you can just stroll right on down the road to the sale.

Commissioned salespeople are often reluctant to change the way they do business. They are not comfortable and tend to regress to their old habits after a failed attempt or two. Additionally, some compensation plans effectively penalize the salesperson or sales manager if the deal winds up going to SF. (Not a good thing, but that is another article.) The salesperson ultimately works the deal conventionally, either out of fear or because they feel they won’t be compensated justly if it goes SF, and as a result, they blow up more deals than they sell.

The other derailment is when a salesperson accomplishes identifying the RB successfully, but the sales or finance desk doesn’t know how to use the information. They mistakenly think all they have to do is to work payments based on shorter term and high interest rates and everything else will fall into place. That doesn’t work either, as the finance office has no room to deduct the acquisition fee, the deal becomes over-advanced, or there is insufficient equity to allow the deal to take place.

The only way to overcome the obstacles created by the indifference or ignorance of a salesperson or sales manager is through strong, consistent and repetitive training of all parties. Salespeople, sales managers, finance managers and SF managers need to be educated as to what needs to take place, when it should take place and how it will be executed. Follow that up by measuring the results (measure how many RBs are identified and worked as SF before they are shown a vehicle, and how many are delivered), which allows you to manage the progress as well. These are basic systems and processes.

The metaphor of using green balloons and red balloons (yes, it is a metaphor; a dealer once thought I was serious about actually handing out balloons) may seem simple and childish to some, but for those who understand how important these qualifying steps are to a special finance department, it can turn the sales process into child’s play.

Skip the helium tank, and until next month,
Good Selling!

Vol. 9, Issue 7

About the author
Greg Goebel

Greg Goebel


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