Change is a Good Thing

It amazes me how many managers settle for the status quo. They simply don’t want to learn anything new.  They’ve been doing business in the same way for decades; why change now? Because, without change, they stagnate. Profit numbers stay the same or slide downward. When we challenge ourselves, we may feel uncomfortable for a while, but it’s when we decide not to be uncomfortable that we quit learning! Life is about challenges that take us to the next level, and, in business, challenges take us to the next threshold of profitability. Winston Churchill once said, “There is nothing wrong with change, if it is in the right direction.” Elbert Hubbard, an American philosopher and writer said it another way, “The path of least resistance is what makes rivers run crooked.” 

When we bring children into this world, we know they will bring change to our personal lives. Some of us even hope one of them might become the next president of the United States. Recently, I was driving around town with my daughter, looking at houses. She mentioned that she didn’t really enjoy the activity, because she doubted she could ever afford one. I told her that as long as she believed that, it would become a self-fulfilling prophecy. She should never take NO or NEVER for an answer. She should think BIG and then take whatever steps were necessary to accomplish her goal, one at a time.
 
This advice works for dealership personnel, too. I have been working with dealers on menu selling since 1997.  It is mind boggling to me how many sales managers continue to desk deals like they did in the 70s and 80s. I cannot understand why dealers tolerate such conduct. Certainly, we must sell cars and make a profit, but in today’s market, there is such a thing as compliance and treating customers with the utmost respect. It is very difficult to maximize profits utilizing a full disclosure menu presentation and closing the deal on payment and price. But, let’s think about this for a minute. Would anyone, who is thinking clearly, take customers into the finance office to close deals on a payment or price by simply sticking a menu in front of them with all the pertinent buying information and a base payment? Customers would say to the finance manager, “I thought my payment was going to be $100 less!” or ”I thought I was going to get a lot more for my trade than that!” How is the finance manager supposed to negotiate a deal on payment or price and, by some feat of magic, present a menu with credibility? Customers’ antennas of suspicion will rise and they will be in no mood for any suggestion they should spend more . . . for any reason. The finance manager will have lost any chance to sell products.

Dealers wonder why their staff is not increasing profits through menu selling. This is why. Time after time, too many finance managers are not utilizing a full-disclosure menu, when they have to close the customer on payment or price. They use a hybrid method: option selling. It looks like a menu, but it is far from being a menu. It’s payment packing made simple. In this method, finance managers don’t have to disclose a base payment or the pertinent buying numbers. They simply offer their customers the choice of product options, hoping they aren’t smart enough to ask for their base payment. 

Payment packing is against the law. Compliance is a “change” that every dealership must exercise and standardize. All sales and finance managers must work together to get menu selling off the ground and working efficiently. There will be no increase in profits, while minimizing liability, if they don’t cooperate and understand the benefits for everyone involved—the dealership, customers, and themselves. Many finance managers will undoubtedly work their pay plan, but that may leave dealers high and dry. No dealers should believe that once they introduce the menu to their finance personnel they will present 100% of their products to 100% of their customers 100% of the time. That is the goal and may happen, but too many managers won’t disclose the base payment and pertinent buying numbers to their customers. And that creates problems.

An article of interest appeared in F&I Management Technology: “AutoNation Takes Payments on the Floor!”  Kevin Westfall, AutoNation’s vice president of sales, definitely knows what he is talking about. His company is the number one retailer and a no nonsense dealer. It endorses the highest ethical business standards. AutoNation averages $1500 on the backend and accomplishes this through full disclosure selling. It isn’t necessary to cheat or to conceal numbers, to make profits! But, it is very difficult to be compliant with menu sales, if sales managers want to do business the old way . . . to use the longtime passé “do whatever it takes” mentality to sell a car. 

Sales managers should get everything out on the table. They should never hesitate to tell their customers what they are paying for a vehicle and their payments. They should ensure that all pertinent buying information is discussed and understood prior to sending any customer into finance. Finance managers should be able to tell customers the base payment and know that it has been agreed upon. There is no room for mistakes. Finance managers should be credible and professional and have their customers’ interests at heart.  People buy from those they like. Every finance officer should be able to say, “Mr. Smith, I want you to know we can absolutely delivery the vehicle at the payment of  $XXX, but that may not be the best payment for you. I have other options to review with you, but before I go over them, I would like to once again confirm the pertinent buying information, just to make sure it is correct. This will take about five minutes. May I begin?” Any officer that is unable to state the base payment and all pertinent buying information is not prepared to present the menu.