Do I Need a Selling System?
    or do we just need better processes?
Copyright© 2008-2010 Automotive Dealers Network. All rights reserved.
By Joe Verde
President
Joe Verde Sales & Management Training
email:
jverde@automotivedealersnetwork.com
Joe Verde Sales & Management Training is the largest sales
and management training company in the Automobile, RV
and Marine industries teaching their exclusive formula for
success. Joe Verde Sales & Management Training has a 23
year, verifiable track record of success and over half the top
500 dealerships are their customers. Additional information is
available at www.joeverde.com.
I get this question a lot - and the short answer is ‘Yes’.
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First, about ‘systems’. As soon as you say ‘Selling System’, I think too many people immediately get that negative
image of those old-school systems.

You know – the ‘you stand there, do this and do that. When this happens, do this, and if that happens, do that.’ The
results of those old-school systems is that salespeople usually prequalify their customers, land them on a car, get a
commitment today, turn to their closer and then grind out a deal.

In those old-school systems, someone besides the salesperson may be the greeter, someone else may be the closer,
someone else may do the delivery, someone else may take the incoming sales calls and most likely someone else
does the follow up later.

I know that most dealers who set up a ‘system’ did it instead of setting up an effective selling, training and effective
management ‘process’.

Why? Because most thought it would be easier in the long run than trying to hire more qualified salespeople, than
having to train them every day and having to manage them every day, too.

Just like setting up a phone room or a BDC, instead of teaching salespeople how to handle the phones properly and
managing them every day – hiring a different group of people to do the job salespeople should be doing, just seems
easier than recruiting the right salespeople, training them properly and then managing them effectively.

Most of the time, a ‘system’ is implemented as an alternative to properly training and managing a sales team.

♦ Do systems work?

Of course – if the directions are followed! Any dealership with a below average group (under 10 unit average) will
increase production to average with any process, if it’s applied consistently.

(We’ll talk about the problems later that easily override every benefit of that old-school “system selling”.)

Why do systems work? Because a system forces salespeople and sales managers to do their jobs - kinda.

Systems, like effective sales procedures, produce higher sales because they take the variation out of everything.

Compared to salespeople hanging around all day waiting for an “up”, then only giving 4 out of 10 a demonstration and
wasting 6 hours of their shift every day – the worst system on the planet will improve sales.

Systems force salespeople who aren’t very skilled, very motivated, or don’t know how to follow a selling plan, to follow
at least some rules. Systems also remove a lot of decisions from managers who don’t like, don’t want to or can’t make
decisions on their own.

With a system, instead of training and working with their people, a manager can just say, “Here’s the system, now
follow it or don’t work here.”
    Systems force average performance
    out of salespeople and managers who
    have below average skills.

In reality, systems are procedures but only on a first level basis. They don’t go deep enough to build a business, and
in fact, will actually prevent growth. Systems just help you sell a car today.

This isn’t management’s fault. Just the opposite is true: with systems, managers learn to discount the most productive
things managers could and should be doing – and because of the system, they’re forced to focus on the worst things
they could do for unit sales, growth, gross, retention and CSI.

A typical system is very one-dimensional on a sales level. Salespeople and managers don’t know much, so they can’t
do much. That means someone else has to be hired to do most of the job the salesperson could easily do if they were
taught. That also means the system adds another layer of employees, so in the end, systems are way more expensive
than just hiring and training and paying professionals in sales.
    ♦ What are the disadvantages to systems?

1. Higher turnover. You’ll have a tough time building a ‘Professional
Sales Team’ in an old-school liner / closer system.

    Why? Most of the salespeople who get pretty good in the system will eventually leave your dealership and work
    down the street where they can escape the ‘average production’ boundaries of the system, and so they can
    make more money.

    Either that or they’ll want to be promoted to ‘assistant sales manager’ (closer) to get out of the every day grind
    of working on the floor under the rules of the ‘system’.

    Why do they go down the street?

    A. Higher pay. Since systems only focus on a sale today, dealers need more layers of employees to do the basic
    tasks that every person hired into a ‘sales’ position should be doing: selling, closing, follow up, delivery, phones,
    Internet leads, retention. So a salesperson who is good at their job (selling, closing, follow up, delivery,
    telephones, etc.) isn’t making as much money as they could earn somewhere else.

    B. Pros are penalized. A real pro is always penalized in a rigid system. Why? Because most systems are
    designed to control an amateur salesperson who has very few real selling skills and not to develop or assist
    professionals in sales. The pro knows he or she will lose sales and money because a) they have to take a
    number to talk to a prospect on the lot, b) the protection stinks and they’ll be sliced and diced on deal after deal
    when they do follow up, c) even when they sell a vehicle at full pop, they have to get the closer involved, d) and
    when they do need help on a deal, they’re forced to turn to the closer who hasn’t built rapport, hasn’t created
    the value and is almost always price focused in his / her closing to make every sale. They lose money every
    month.

    C. Pros have to work a ‘B-Player’ schedule. The schedule almost every dealership works from is ineffective for
    every above-average salesperson and costs your dealership a ton. When we go over this in class, dealers and
    managers are dumbfounded at how ineffective this is for a good salesperson,
    and how much it costs their dealership every month.

2. Costs are another disadvantage. Systems will cost you more in a year than properly training salespeople and
managers to develop professionals will cost you over a lifetime.

    A. Ad costs skyrocket - and never come down. With underskilled people in sales you have to keep the floor filled
    with traffic. It’s no secret that poorly-trained salespeople really can’t sell, close or handle their customer’s
    objections. That means most sales are lost and most buyers end up buying down the street before anyone else
    ever talks to them.

    With pros in sales (20-30-40-50-car guys) your ad costs and overall sales expenses drop like a rock. You need
    less floor traffic because they close more of the people they talk to and because they build their (your) repeat
    and referral business and don’t rely on walk-in traffic for most of their sales.

    B. A system guarantees turnover and that costs you another ton. Turnover is the most expensive problem in
    your sales department. It doesn’t cost just $2,000 to run the ad when you have to replace a salesperson. In our
    management class, attendees do the real math and consistently agree it costs you over $100,000 to replace just
    one salesperson.

    C. Low / No Customer Retention. Systems aren’t very customer friendly and if the customer didn’t have that
    much fun buying their first car, why would they want to come back for the next one. That’s especially true today
    since ‘liking’ the salesperson is what customers say is most important. Retention requires three things; a
    process, training and daily management. Systems lack every requirement for retention.

    ♦ Unseen costs: You’re paying for at least two people to do each of the things you hired a salesperson to do.
    Salespeople are supposed to sell, but can’t, so you need a closer. They’re supposed to follow up, but can’t, don’
    t and won’t, so you need a BDC. Some dealerships have even given up on salespeople delivering the vehicle
    right, and because CSI is so important, they’ve hired a specialist to do that for them, too.

    Look around and do the math. In a system store, you’re paying 3 or 4 people to do one job. Talk about
    expensive!

3. Short-term success. In the old days there were a lot of bad products, so naturally people became product loyal to
the good ones. Today all products are good, and now people buy from people, not manufacturers or dealerships.
Systems actually prevent growth because they create turnover, and with constant turnover, you can’t build your
business.

    You can’t retain customers until you can retain salespeople.

    The Follow-Up Factory won’t help you build your business because nothing is personal. I’ll agree, forced follow
    up by un-skilled, un-motivated salespeople or an outside company is better than nothing, but not by enough to
    matter.

    To build your business, nothing works as well as follow-up done by a professional in sales who understands the
    value.

    4. Lower CSI. Speed kills ‘selling’ – slow kills negotiation. Plus, negotiating is rated as one of the things
    customers dislike the most. But when you dig into the stats and understand the players – what they hate is
    having to negotiate with a bunch of amateurs who don’t build value, only pre-qualify and keep running back and
    forth from them to the desk like a rabbit offering, “Would you buy it if we could...”
Whether we’re a ‘system’ store or not, what processes do we need to sell more now and grow?

We don’t have the space to spell out everything we focus on in here, on JVTN® or in class about the processes you
need to sell more today and grow. For more info you can get my book, “A Dealer’s Guide To Recovery & Growth In
Today’s Market” for free. I’m giving dealers and managers the opportunity to get my book for free, and all I ask is that
they pay for shipping. Call today at (800) 445-6217.

Selling Processes You Need

• An effective selling process. Salespeople need to learn how to follow those Basics we teach in class and on JVTN®.
Then they have to be managed daily and required to follow an effective process with every prospect – every time.

• An effective closing process. Selling (building value to the emotional point of mental ownership) and Closing (getting
the commitment to purchase) are definitely connected, but they aren’t the same by any means. The most common
question we get in class is, “What’s the best close?” There isn’t a best close because closing is a process, not a
question.We teach a very clear, step-by-step selling and step-by-step closing process, that will take 70% of your
prospects from the curb and into the office in about an hour-and-a-half with a firm commitment to own it now.

• An effective negotiation process. Speed kills sales, and slow kills negotiation. That means you need an effective
process to quickly take the customer through the final step of the buying process. Negotiation is also a separate
process in
the overall sale: Build Value / Close / Negotiate. You need a simple, effective process you follow every time with every
prospect, just like the one we teach. It’s a simple 3-pass negotiation process that takes less time, maximizes the gross
and increases customer satisfaction.

• An effective transition process to Finance. “Hey Jim, these are the Smiths – are you ready for them?” is not how you
transition a prospect from an, “OK, we’ll take it,” in the negotiation, to Finance. The sale isn’t completed until you have
a delivery and Finance is just the next step in this total sales process. Plus, the goal with Finance is to sell products
and services, so the set up (process) is critical.

• An effective Finance process. If salespeople and managers have been consistent in the first four steps (processes) in
selling this vehicle, Finance should be a continuation of the selling and closing process the customer has been
following for the last two hours. If it is – Finance will be paging the salesperson soon and will increase their penetration,
increase gross and have a deal that goes down fast.

• An effective delivery process. Yes, delivering the vehicle and recapping features is critical. More critical for retention
is having an effective process to get this customer set-up in service, before they leave in their new vehicle. 80% of new
vehicle deliveries never become service customers, and 80% of service customers never buy at your dealership again.
An effective delivery process has to focus on retention and that has to include Service at delivery.

Business Development Processes You Need

• Lead management process. You spend way too much money to make the phone ring and your in-box light up each
month with hot leads – to turn them over to whomever can answer the phone the fastest, or whoever likes computers.
Your lead management process with Internet leads and incoming sales calls has to have a single end goal: get the
prospect on the lot so you can sell a car.

Phones: Right now you have salespeople either trying to sell a car over the phone or they’re educating the prospect
on price, trade values, down, payments and incentives – hoping the prospect will just say, “Great, when can I come buy
it?”

Internet: About the same thing; they’re trying to work deals in an email instead of on the lot. And unless you’re one of
those top 20 Internet dealers who actually ‘sells’ a car over the phone or over the Internet and people fly in to take
delivery like at Dave Smith Motors (Hi, guys!), you need to control this process, get a phone number, turn that call into
an appointment, and put all of those leads on the lot.

• Lead generation process (aka: prospecting). Your salespeople need the training so they know how to prospect, and
then they need the daily requirements and hands-on daily management so you can stop blowing all of your money on
advertising to bring in tough-to-close, low gross, price shoppers, and start bringing in easy-to-close, high gross
referrals. The key words in this paragraph: training, requirements, daily, hands-on, and management.

• Unsold follow-up process. At $500 per delivery, you spend $100 per prospect just to put someone on the lot for a
salesperson to talk to. 78% are ready to buy, you’ll close at best 20% overall (stop with the “we close 40%”), and that
means out of every 100 prospects on your lot, you’ll deliver 20, and 58 buyers will leave and buy somewhere else
unless you act fast. You’re sitting on a gold mine with unsold prospects, so read those key words in the last sentence
(above) again.

• Customer retention process. To be clear: Sold Customer Follow Up by the salesperson is not a retention process, it’s
only one stage of an effective retention process.

Repeat customers cost you less, pay you more and you can count on them forever – if you’ll put a solid retention
process in place now. Who’s involved? Sales, Management, Finance, Service, the Dealer and every other employee
who touches a customer in person, by mail, by email or by phone.
                                ---------------
Can you sell cars without these extra processes? Absolutely! Spend a ton on ads, have a 4-day event, put a Gorilla on
the roof, give away hotdogs, put a clown, a Sherman tank, and a fire truck on the lot – then paint blue and red dots
everywhere, assign salespeople a color and put one on every dot and have
a back up in place to take over as soon as the first one gets an ‘up’. Hire anybody who shows up for a sales job, teach
them nothing, play the numbers, pre-qualify fast, skip steps, teach your salespeople to keep repeating, “If we can
make you the perfect deal, will you buy it today?”, hire a closer, deliver a ton
and hopefully you’ll only unwind half of them next week.

Right now Joe Verde is offering his book, “A Dealer’s Guide To Recovery & Growth In Today’s Market,” free to dealers
and managers (recipients must pay shipping costs).
TM