The easing of tight vehicle inventories has dealership groups retraining sales staff to shed “bad habits” learned during the pandemic, teaching them how to sell vehicles profitably in a more competitive environment, retailers say.
Gone are the days of take-it-or-leave-it sales or order-taking during those days, they say. Now, more vehicles on lots means buyers have more choices, and they expect personalized service and competitive pricing.
The goal is to achieve sales with a reasonable profit margin and build customer loyalty, while avoiding having to heavily discount prices.
“We’ve used the term ‘back to the basics,’” said Michael Wyant, COO of the Saskatoon-based Wyant Group, which has 29 dealerships in Alberta, Saskatchewan and British Columbia. “But the basics have evolved.”
The COVID-19-era sales environment permanently changed buying habits, Wyant said. Online-driven sales accelerated the shift to an omnichannel approach, using technology and processes aimed at providing a seamless buying experience for consumers whether they shop online, in-store or both, Wyant said. Now, the in-person contact varies from buyer to buyer.
“It’s retooling the process to meet the customers on their terms,” Wyant said. Sales staff are learning to “ask the trh ight questions” at the beginning of the process.
For example, a typical customer will have heavily researched a vehicle online before reaching the dealership and will have specific questions on such issues as whether they can get the desired options and when the vehicle will be available. Customers also want to deal with a dealership and a salesperson they trust, Wyant said.
“We have to do more listening than talking,” he said.
At the height of the vehicle-inventory crisis, Wyant said, customers were being dictated to.
“It was, ‘Here’s what we have, here’s the price ... do you want it or not?’” Wyant said.
“That’s a bad habit carrying forward.” Guidance on the new approach to customers is delivered in daily morning huddles at the group’s dealerships and through weekly one-hour training sessions, Wyant said.
At Winnipeg’s Birchwood Automotive Group, the pandemic accelerated the shift to omnichannel communications, said Birchwood CEO Steve Chipman. In particular, the group uses a lot more video-to-customer presentations of vehicles.
But one thing that hasn’t changed is the emphasis on relationships, he said.
“People want to buy a car from somebody they like so they feel they’re in control of their purchase.”
Buyers are once again looking for price discounts on vehicles, a challenge when automakers are charging dealers more for them, Chipman said.
The average price of vehicles on Birchwood’s 24 dealership lots has risen to $66,000 from $55,000 a year ago, Chipman said.
“The challenge is [buyers] are starting to see discounting in price,” he said, and some buyers threaten to go to a dealer who offers a lower price.
“How do you deal with that?” Chipman said.
The answer: Emphasize a better buying experience and personal trust in a sales associate, he said. With annual turnover of sales staff at about 15 per cent, Chipman said, each year about 20 new sales employees across the organization have never operated in the pre-pandemic sales environment and they must learn how to build relationships of trust and deal with price competition.
It’s one reason, Chipman said, that Birchwood has a full-time training team. Robert Levesque, a Nova Scotia-based trainer with 40 years’ experience in automotive retailing, agrees that the pandemic was a catalyst for the shift from all in-person purchases to the omnichannel approach. In the post-pandemic world, most buyers have researched the vehicles online, read third-party reviews and found the retail price from the automakers’ websites.
“When a customer comes in, they have a clear picture of what the vehicle is going to be,” Levesque said. “They have done everything online except actually buying the vehicle.”
CUSTOMERS: ‘TREAT US NICE’
Not all dealerships have gotten the message, he said. In several U.S. surveys, buyers reported “atrocious” experiences because sales staff didn’t listen to what they wanted, he said. In effect, buyers are saying, “Now we have a choice, so treat us nice,” Levesque said.
It is an old lesson that must be learned anew, he said, adding that dealerships that resist changing their approach “are not going to exist anymore.”
A successful negotiation, Levesque said, relies on four pillars: the vehicle itself, the reputation of the dealership, the automaker and, ultimately, the sales associate. Sales staff should not treat the customer as they would like to be treated, Levesque said, but, rather, find out how the customer wants to be treated — from the customer.
“You have to build a relationship of trust,” Levesque said. “They want a human being that will take a consultancy approach.”