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Archives for July 2010

Will People Pay MSRP and Should You Feel Guilty For Selling It To Them?

July 23, 2010 By Arnold Tijerina

I get asked by non-automotive industry friends all the time about car salespeople. The questions typically pertain to the questionable practices that they perceive car salespeople as having. We all know the stereotypes and they exist very much today as they did in the past despite the fact that, in my opinion, many dealers have changed their business practices either because they’ve come to the realization that you just can’t rip people off or it’s been regulated out of them.

“Perception is reality” is the old saying. Holding gross on a deal is considered good business by the dealer while the consumer thinks they’ve been ripped off.
One of the more common questions I get involves MSRP. What is it? Do people really pay that? Why? Don’t you feel guilty selling it to them at MSRP?
When they ask me that, I tell them this story:
A few years ago, there was a knock at my door. This little Asian guy offered to clean all the flooring and furniture in my house free of charge. The carpet in my house was the original carpet that was in it when we bought it and having it cleaned had been on my “to-do” list for awhile. He said there was no trick involved nor any obligation. I agreed. 
I watched this little Asian guy proceed to vacuum my whole house. He then pre-treated the couches and shampoo’d and cleaned them. After that, he pre-treated and shampoo’d the carpet in my entire house – all 2500 square feet of it. I watched him scrub and put elbow grease into each part of this process. It took him 5 hours. He didn’t say a word the whole time.
Being a salesperson, I was waiting for a pitch. At the end, the house and furniture looked fabulous! I appreciated all the hard work and effort he put into it and told him that. I told him I was a salesperson and that I understood he was selling this machine and gave him permission to “pitch” it to me. 
He told me that he had been for the last 5 hours.
I thought about it for a minute. The vacuum we had actually had just broken. It was not the first time it had broken. The vacuum only cost about $200 but we’ve had to have it fixed at least 3 times over it’s lifespan at $50 each time. The vacuum he had used undoubtedly, in my mind, did a fabulous job cleaning the house. I asked him how much the vacuum cost and then proceeded to pay $1700 for it.
Now, since that day, I’ve had quite a few friends tell me that they owned a Kirby and had paid much less for it. They told me that this little Asian guy ripped me off.
I told them I didn’t feel ripped off at all. The salesperson that came to my door had met me for the first time. I was probably the hundredth door he had knocked on that day and probably the only one that took him up on his offer. I knew when I invited him in that he wanted to sell me the vacuum. After he was done, I thanked him and complimented him on his hard work.
Through his hard work and effort, he slowly and methodically, over the course of 5 hours, BUILT VALUE into his product. At the end, I FELT that the vacuum was WORTH $1700. To this day, I don’t regret paying that much for the vacuum (which still works great and runs beautifully). I’m sure that I paid MSRP. I didn’t haggle nor did it even cross my mind to do so.
You may be saying that you don’t have 5 hours to waste with a customer like that. Salespeople tend to pre-qualify and try to figure out whether the customer standing in front of them is going to “buy today” and then base the time and effort they spend with the customer on those perceptions. 
The customers that the salespeople think are buying today get all the attention from the salesperson and, at times, the salesperson will spend 5 hours with a single customer from contact to close. The difference is that most of that time is CLOSING and not BUILDING VALUE. 
If a salesperson spent more time building value with EACH customer without trying to figure out if and when the customer is going to actually buy something, I believe that the process would take the same amount of time (whether that is 2 hours or 8 hours) but, in the end, the gross would be higher, the close would be easier and the customer would be happier.

Salespeople wonder why the people that don’t “buy today” (but do come back and buy at a later date) don’t remember their name. It’s because not only did they do nothing to build value in their product, but they did nothing to build value in themselves.
The little Asian guy’s name was David. He is one of the best salespeople I’ve ever met and not once have I regretted paying MSRP.

Filed Under: Automotive, Best Practices, Sales, Training

On Facebook, Sometimes Less Is Better

July 16, 2010 By Arnold Tijerina

Social Media Marketing is not meant to be your businesses’ sole means of marketing but rather it’s meant to compliment your existing marketing.

I see businesses scrambling to create presences in the social media spectrum daily without any clue what their goal is. Seeing as I’m in the automotive industry, most dealerships that I see diving into the social media party believe that the “goal” of this endeavor is to “sell cars”. By their actions, it seems as if their true goal is “acquiring friends”. If you go into Social Media Marketing with either of these goals, you are wasting your time.
I’m going to focus specifically on Facebook here but this advice applies to pretty much any social media site.
When a business first dives in and creates a Facebook page, they concentrate on acquiring as many “friends” as possible. While it’s fun to see that you have lots of “friends”, the whole purpose of your Facebook page is to engage with your customers. 
Are these “friends” you’re acquiring customers (or potential customers) or are they a collection of other dealerships, vendors, employees, etc.? 
If your answer is the latter, your social media efforts are wasted time. Chances are really high that none of these people are going to buy cars from you, get their cars serviced at your dealership, or do anything that is income generating for your business. 
What you want to do is captivate an audience of people (ie. friends) that are potential income. You want to market your Facebook page to your real customers. Tell your walk-in traffic. Tell your customers who buy cars from you. Tell your service customers. Include your Facebook page in your other marketing. 
Acquire “friends” that are meaningful. 
I’d rather have a group of 100 customers that I can engage with that would potentially do (or have done) business with me than 5000 friends who will never buy anything.
This obsession with gaining as many friends as possible is counter-productive. The goal of Facebook marketing is engaging with and marketing to your customers, not acquiring friends. If you do it right, in a passive, non-intrusive way with meaningful content, your message will be heard by the right people (customers) and you will reap the benefits.
It’s the quality of your “friends” that count, not the quantity.

Filed Under: Automotive, Best Practices, Internet, Marketing, Social Media

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