Toyota Dealer Endorses One-Price Sales Sales Staff Writes Deals and Finalizes with a Menu Presentation!

For most dealers nationwide, a one-pricing sales strategy is a tough concept to accept. To even
suggest that their sales staff should be given the authority to finalize every
transaction at their desks and include the menu presentation without sending
any customer into “the box” is heart-stopping for them. What about banning the
F&I office altogether?

Naysayers will tell you it can’t be done. You have to lock down customers in the traditional
F&I office in order to sell money-making products that earn profits. No
sales person can possibly sell the car and aftermarket products as well!

Well, one dealer I know is doing just that and very successfully. During these tough economic
times, Colonial Toyota in Milford, CT, made a critical decision. The dealer
chose to ban the F&I office and let his sales staff take charge of every transaction
from beginning to end. He gave
them all the title of “sales manager.” I applaud Colonial Toyota for realizing
that today’s customers have changed and they needed to initiate their own
changes to capture their business.

I was hired to train these sales managers in the proper and most effective presentation of
menu presentation. I was skeptical at first, and then wholly impressed by this
dealer’s innovative “out of the box” thinking. The sales staff was enthusiastic
and infused with optimism. The showroom is humming to a different beat of the
drum and the excitement is palpable. Customers are buying and liking the
upfront honesty projected by the staff.

Ironically, far too many dealerships still don’t understand the necessity for transparent
selling. They would rather stick to the status quo and continue to use outdated
sales techniques. Their F&I managers tout their use of menu selling, but
their process is seldom conducted with proper disclosures. They rarely review
the base payment with customers for fear that any upfront disclosure will
reduce their personal income. Although there are several great menu software
providers on the market, the reality is that individual dealership menus are
often changed to accommodate the missing base payment or itemization of cost.
Dealers and F&I managers fear they cannot make a profit by being upfront
with their customers. It’s time to set fears aside.

One-price vehicle sales and the menu go together. Take Saturn, for example. Back in
1989-1990, when they first opened their doors with a brave new concept of “one-price”
sales, the so-called experts in the industry said it wouldn’t work. Customers wanted to haggle for the best deal.
Customer wouldn’t pay retail for a car without the bargaining process.
Surprise! Customers did buy Saturns
with the one-price offer and were happy to do it. The showrooms were packed
with customers and the cars were hard to come by!

Especially to today’s recession market, more dealers should think seriously about changing
their ways. Perhaps they should get on the phone and talk with other dealers
who are successfully using the one-price sales system. They will learn that a transparent finance process is the best
way to increase overall profits, while limiting liability and keeping customers
coming back for more. They will learn that, sometimes, it’s best to just clean
out the barn! Get rid of old practices that aren’t working. This clean-up
process comes with an important “fiat,” of course. The sales staff must receive
thorough training in how to effectively fulfill their new obligations. Dealers
will have to make an investment in their education so that everyone is on the
same page.

AutoNation demonstrated that one-price sales on pre-owned vehicles is not only feasible,
but profitable. In 1996, when this pioneer of menu selling opened its doors to transparent
selling policies, their showrooms were open environments. Like Saturn, the
showrooms were soon packed with customers who weren’t dragged from one office
to another. They were sold the vehicle of choice and a menu presentation
followed. The pessimists were astounded by the results. How could anyone make a
profit this way and, especially, by being honest and not playing the game? In
AutoNation’s menu selling, every product was priced consistently and offered
100% of the time to every customer! And . . . no customer was ever sent into “the
box” for a grueling, much dreaded, pressure-filled sales battle!

The more transparent your sales procedure becomes, the more income you will generate. That’s a fact. But it’s also true that
nothing good comes without hard work. Changing ingrained habits is a daunting
task. Doing a complete turnabout is scary. Learning innovative techniques may
seem risky, but the rewards are plentiful. Now is the time for your dealership
to take a new look at its old ways of doing business.

Most of us had to spend considerable time learning now to use computers and the Internet and
the plethora of software available for running our business. The long hours
spent were worth it. Our office work was streamlined. Communication with customers
and suppliers improved and business profits grew. The quantity of documents
filed in already bulging cabinets was significantly cut. We became leaner and
more proficient.

When initiating a change in procedures, training is critical. You want your staff to feel
secure and optimistic. This only comes when they can meet any customer at any
income level and guide them intelligently into making the right choices. Give
them the tools to be their best. Customers buy from those who exude
self-confidence and know how to communicate effectively. Give your sales team
new responsibilities, new techniques, new expectations, then train them in how
to be successful in their endeavors and then watch them reel in the profits!

CCI Learning Center provides online workshops for any professional in or out of the
automotive business who seeks a position in management. We work with
automotive, RV, credit unions and call centers nationwide. CCI Learning Center
will be offering a new online workshop on developing an “in-house, virtual
finance office” soon! Your dealership can be open for business on a 24/7 basis.
We are experts in teaching your team how to increase profits by thinking
outside the box! Give us a call . . . today!

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Comment by Rebecca Chernek on September 27, 2010 at 11:22am
Bravo! You got it! Thanks for your great response to the one-pricing issue. I’ve been preaching for years, in my workshops and in-house evaluation sessions, that ongoing, updated training is essential and those dealers who understand the value of education for their sales and finance staff will see more sales, higher profits, and well satisfied customers, who then become their cheapest and most efficient form of advertising. Knowledge of the entire financial process is key, and if the sales personnel are expected to close sales, dealers must provide them with all the education and training required to ensure full discloser and a satisfying closure. The ability to communicate effectively takes practice; not every sales person has this ability/skill. Dealers need to become more proactive in weeding out those who don’t understand the facts and figures AND have the ability to personalize them for each individual customer successfully. Customers come in all varieties . . . their needs, budgets and personalities differ. Unless dealers themselves update their skills and know-how about the influence of technology and manufacturer influences on their business, they won’t hire the best possible staff or incorporate ongoing training into their shops’ budgets. Success always starts at the top. One-pricing works, when dealers learn all the ins and outs and then train their staffs accordingly.
Comment by Steve Richards on September 26, 2010 at 8:15pm
Becky, great story and one which will be repeated with an increasing degree of frequency as time marches on and the dinosaurs that dominate the retail business become extinct. I've discovered the the primary issue with the one-price philosophy whether it’s Saturn’s, Land Rover’s, or any retailer’s efforts isn’t “one-price.” It’s the complete absence of “selling” as regards the rest of the finances involved in the transaction. Just because a dealer’s adopted a one-price philosophy doesn’t mean the “other” numbers don’t have to justified, defended, or negotiated; pick the term that makes the most sense to you. Too many people see one-price as an end all be all. It’s not, but it is a GIANT step in the right direction.

The necessary cultural change is actually a very easy transition; if one knows how to demonstrate a culture that is less offensive (to the consumer), less expensive (to the dealer), more efficient (for the sales team and the customer), and more enjoyable for all parties. Who is going to resist that type of cultural change? Answer: the “desk” managers who will no longer be the central figure in the sales process. Making one-price work requires the sales team to hold intelligent conversation with the prospective buyer, intelligent, honest, logical, and mathematically correct conversations, especially during the closing sequences. Most management personnel can’t carry on an intelligent (as previously defined) conversation much less teach it. NOT because they aren’t talented, smart, or ambitious, but because no one has trained them how. Most managers attained their positions via personality or ambition driven sales success. They can’t transfer either one of those traits. And few dealers provide their managers any modern sales process training much less modern sales strategies or tactics. Ergo, managers manage the way they were managed and they weren’t managed in a one-price environment.

Making one-price work hinges on communication that takes place during the first twenty minutes of the transaction and the last twenty minutes. The “in-between” is show and tell and with the increased product communication coming directly from the factory to the consumer, even that part of the sales process is losing its importance. The one-price “whiz kids’ have about 25% of the formula figured out and that 25% is the first ten minutes of the prospect/sales person interaction. The other 75% of the communication taught, in most cases, is nothing more than “warmed-over” traditional automobile sales rhetoric.

In those rare instances where one price works well; meaning the buyer has a pleasant experience and the dealership makes an above average profit, it is almost always due to the extraordinary people involved, not the process and certainly not the training.

The menu makes terrifice sense, but a menu presentation without intelligent financial conversation is only getting part of the job done.

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