For many dealers, sales have screeched to an all-time low, and no amount of pep talks or clever selling schemes are working. They scratch their heads to find the reasons. They see 2007 as the toughest year for sales they’ve ever experienced. For other dealers, however, times couldn’t be better. Sales are going through the roof, while they are dancing in the showroom. So, why the disparity for some?

These latter dealers have found successful alternatives to increasing sales and their net bottom dollars. They have instituted a carefully planned policy and made a concerted effort toward selling more pre-owned units, while providing clients with unconventional finance options, especially those with not-so-great credit. Some of these flourishing dealers have reaped significant profits by offering nonprime options.

With the right mindset, non-prime can be extremely lucrative. Often, long-time managers will say that non-prime doesn’t even exist in their stores and shouldn’t. Sales personnel are even instructed not to spend time with customers who may have slow-pay histories, without ever looking into the customers’ histories. Other managers shake their heads and, with tightened lips, refuse to see the possibilities. That is too bad because when all is said and done, the banks are the final decision-makers (not the dealers or customers) regarding whether or not financing a vehicle for a particular customer is feasible.

Dealers with reluctant managers say they’ve tried non-prime and it doesn’t work. Perhaps the reason lies directly on the people in the sales department and their attitudes towards the process. Sales personnel are an integral part of the procedure. No vehicles can be sold profitably with a non-prime transaction unless everyone in sales is properly trained.

Training is essential. An untrained salesperson can make or break a potential non-prime sale with a simple look or an inappropriate question or response. The road to success in sub-prime sales begins in the classroom.

Remember the old adage about having to spend money to make money? Spending money on the training of personnel always increases profits. Sales personnel learn specific ways to meet and greet all customers on the lot, even potential slow-pay customers. Few, if any, deals need to be walked on a day-to-day basis.

A dealer who had recently acquired a store once told me it was a cash store; although a few customers got financing, most paid cash. I found that statement quite shocking. I asked the dealer why this extraordinary phenomenon was happening. Why was his new acquisition a cash store? He said the personnel in the store had told him that for many years only tier-one or tier-two customers came to the dealership. I wondered aloud, “Could your salespeople be dictating that they will only sell to such customers? Is it possible that, over the years, they have settled on only cash buyers and tier-one and -two?” The dealer thought about this and ultimately offered his sales personnel a significant spiff: each write-up would earn $40. This dealer was serious about upping his business profits. It turned out that his decision not only increased sales, but his finance income went up drastically. In fact, the dealer doubled his F&I performance!

Sales personnel can make or break a dealership. Without proper training and direction, however, they will surely diminish sales and profits. Dealers who are interested in capturing non-prime business must begin with classroom training and a carefully thought-through plan. They must begin with a contemplation of the following process.

Why do so many customers go to a specific dealership? It’s not always, because they like the looks of a particular vehicle and have money to burn. They have a need for a reliable means of transportation, but they have a very strict budget. Sales personnel must discover the reasons these customers have come to the dealership. How do they begin? How about: “My name is Bill. Welcome to ABC motors. Your name is? … Would you prefer Mr. Smith, or may I call you Sam? … What brings you into the dealership today, Sam? Are you here to see anyone in particular? (This is especially important if the dealership has a particular individual who handles the non-prime business.) Are you here for a new vehicle, a pre-owned one, or are you here because of our marketing campaign?”

These are only the preliminaries, of course. Now the real work begins. Sales personnel must determine the needs of the customer (4-door sedan, gas-efficient car, sports car, SUV, pick-up truck, mini-van)—not whether or not the customer can get financing for that car. Never begin the questioning process by asking customers what monthly payment/down payment they have in mind or what they want for their trade-in vehicle. A well-trained sales staff will review numbers later after these customers have landed on a vehicle that fits their needs and, hopefully, after a test drive. What trained sales associates know is that they must determine what customers can buy and whether or not they will be approved by a particular bank. They know the bank is the ultimate decision-maker. They also know they must stay away from discussing all numbers on the lot. They have a well-rehearsed list of questions that enable them to come to the right conclusions, including:

• Are you here to see anyone in particular?

• Have you purchased a vehicle from us before?

• Are you trading in a vehicle?

• Are you currently financing your vehicle and for how long?

• Who is currently financing your vehicle?

• Do you like that bank? Are you happy with their service?

• What do you do for a living?

• How long have you been on your job?

• Do you live in the area? For how long?

• Are you a homeowner?

• Are there any other decision-makers to assist you in your choice?

Well-trained sales personnel know that determining the payment budget of customers on the lot or in the showroom will not ensure their approval by a bank source because many customers have been schooled to quote a much lower payment than the one they have in mind. They know this is not an effective way to begin the sale. A properly trained sales staff knows how to ask the right questions at the right time without interrogating or intimidating their customers. They have practiced their questioning method many times and know that, during the qualifying stage, they must stay away from asking payment, price, trade-in and money down questions. These questions come much later.

What about those slow-pay customers who need a non-prime loan? Properly trained sales staffs understand they should bring them directly into the dealership, provide them with a cup of coffee or a Coke, and introduce them to the sales manager. The sales manager, who is also well trained in handling potential non-prime customers, will ask them to fill out a customer statement. By obtaining this statement sooner in the process, the sales and finance managers will be in a better position to help customers purchase a vehicle that their bank source will most likely approve.  No deals are made or closed without the proper training of all sales personnel.

“Proper training” does not mean a two-day course with no follow-up or rehearsals. Training is always an on-going process. Sales staff must be taught and reeducated on a daily basis with specific curriculum.

Philosopher A. P. Gouthey once said, “To get profit without risk, experience without danger and reward without work is as impossible as it is to live without being born.” Dealerships that are starving for sales will earn untold profits and sales personnel will reap countless rewards, if they first initiate a long-term program for proper training and take the risk of serving very grateful and loyal slow-pay customers.

Vol 5, Issue 1