I have written a lot about car buying behaviour, sales process techniques and showroom best practices, and how to build a successful career in the retail car industry. However, when I look back at over a decade of ideas, beliefs, and thoughts I have committed to writing over that period, I have to ask myself, “Is that still true?” And frequently, I have to answer myself by saying, “No. Things have changed and that approach no longer works or that idea is no longer valid”.
For example, I used to say that floor traffic was the lowest percentage closing business. (In fact, over ten years later, I still hear dealership sales managers saying this as if it were a sacred truth of the car business). I used to believe you should focus on the customers in your database, referrals, and be-backs if you want to make the best use of your time and marketing efforts. Even though it is important to do these things, the truth is you probably have just as good a chance of closing that “fresh up” in the showroom as anyone else in your circle of contacts, internet leads, phone ups or past customers. Why? The reason is the high percentage of “transaction-ready” customers. So much preparation and research is done online now that anyone who shows up at the dealership has already selected a vehicle, a dealership (usually based on Google reviews) and maybe even identified (by scanning the dealership’s staff page) who they want to work with.
A decade ago, a lot of the people showing up at the dealership were actually “tire kickers”. A significant percentage in those days were near the top of the sales funnel and visiting the dealership was part of the information gathering and research phase of their process. I recall that many of the questions visitors would ask were to confirm or refute opinions of friends and colleagues regarding a vehicle brand or to explain financing and lease options. A skilled salesperson in those days could take the prospect (over a 3-hour visit) from the “just looking” (top of the funnel) position to a (bottom of the funnel) “buyer”. The top salespeople at the dealership could do this 35% to 40% (or more) of the time (while the average hovered around 20% to 25%).
Google research now suggests that over 92% of the people showing up at a dealership have done their research, selected a short list of vehicles (even the precise vehicle) and are ready to buy as long as they get the treatment a serious buyer expects. These people have not previously phoned the dealership, have not submitted an internet lead, and have not been to your dealership before. But, they know what they want and the percentage of people falling into this category is increasing. It’s resulting in higher closing ratios for so-called “fresh ups” and 90-minute store visits instead of the 3-hour marathons of the past.
The vast amount of information available online, the smartphone (now over 85% penetration in Canada), and recommendations and reviews on the vehicles, your dealership, and (even) you personally provide all that anyone needs to confidently enter a dealership and buy the vehicle they have determined fits their needs. All you need to do as a salesperson is to recognize or quickly figure out that this “fresh up” is already well down the sales funnel and not irritate them by launching into your standard “qualifying” process. Be professional, accommodating and helpful. The car is already sold!