Blog

The Evolution & Natural Selection

Of Automotive Sales

Evolution is defined as a process of gradual, progressive change and development. The “Evolution of Automotive Sales” in the last five to six years has been incredible to say the least. The way the manufacturers market and advertise vehicles is different. The way that dealers sell cars has changed. And even the way that individual sales consultants engage prospects and create opportunities has evolved to an entirely new level.

The Automotive Industry is about to have the best year since the collapse of the economy in 2008. NADA is projecting that we will deliver over 15 Million+ units in 2013! Dealers are selling more cars, more often and more profitably. This is a dramatic difference from the scary times of dealers being shut down and consolidated.

What did we learn from the last five to six years? A lot!

• Firstly, dealers learned that NOTHING is promised and in a blink of an eye it can ALL GO AWAY. That is right, it can all be gone. I have seen dealers that had been in business for almost 100 years either go out of business or were pushed to the brink of bankruptcy.

• Secondly, the dealers that did survive learned that they could NOT keep doing what they were doing and expect different results. (Isn’t that the definition of insanity?) They needed to embrace the concepts of “Who Moved My Cheese” if they wanted to survive, never mind thrive!

• Thirdly, and one of the biggest learning lessons since the collapse of the economy, was the realization by dealers that the Internet was here to stay. Let’s be real. At first the industry perceived “Automotive Internet Sales” almost in the same way “Hip Hop” music was classified merely as a “fad”. It was incorrectly predicted that Hip Hop music would go away once kids got it “out of their system”. That assumption could not have been further from the truth.  Not only did Hip Hop survive, it has grown to become a multi billion dollar industry today and has merged with mainstream “pop” culture. In the same way, Internet Sales, Business Development and Digital Marketing have merged into total Dealership operations. It’s NOT just Internet “Sales”, it is Internet “Service”, “Parts”, “Aftermarket” and “F&I”.

What I have found to be rather shocking is that there are dealers that hear about this “great news” of rebound sales and they don’t believe it. They choose not to believe it. They simply can’t believe it because they personally are not selling more cars. They are not net increasing revenue. So, how can they share in the excitement when it is passing them by? How is it that the economy is coming back for some people and not for others? The answer is simple. The economy is coming back for EVERYONE! The problem is that some dealers are still trying to sell cars like it is 1980, 1990, 2007, etc. But, it’s not that era anymore. Business simply is conducted differently. And until that statement is realized, dealers will continue to get the same results. With the year 2014 just around the corner, times have changed, people have changed, technology has evolved and communication has evolved.

With 85 percent of the world connecting via Email and 62 percent of the world connecting via Social Media, the Internet has become even more prominent and vital to the evolution of the dealership. I truly believe that it was the Internet that saved a lot of dealerships from going out of business and saved a lot more people from losing their jobs during the big recession. The reason I say this is because the dealers that embraced Internet Sales, Business Development and Digital Marketing during the turbulent times are the dealers that survived and thrived and some stronger than ever. They viewed the economic collapse as an opportunity to rise while others fell. Some were even strategically buying up the dealerships going out of business! While some dealers strategically utilized the Internet with a blueprint in mind, other dealers were just lucky and happened to engage Internet Sales and Digital Marketing by default. Either they were desperate or they couldn’t afford traditional marketing anymore, so they turned to digital initiatives as a last resort and found that they had profound success. And at a much cheaper cost! Regardless of how dealers wound up enveloped in Internet Sales, they all found results of success at some level. I am not trying to falsely claim that every dealer that engaged in Internet Sales was successful.  I am simply saying that the dealers that DID engage in Internet Sales were more successful than the dealers that rejected it and felt the Internet was irrelevant and a waste of time.  

We’ve touched upon the evolution of Automotive Sales, but how does the theory of Natural Selection play a role? Natural Selection is defined as the process by which forms of life having traits that better enable them to adapt to specific environmental pressures, changes in climate, or competition will tend to survive and reproduce in greater numbers than others of their kind, thus ensuring the perpetuation of those favorable traits in succeeding generations.

The correlation car dealerships have with Natural Selection is simple. The weaker, antiquated, bad dealerships will either be consolidated or go out of business and the more evolved, professional, modern “good” dealerships will thrive, grow, conquest and continue to evolve.  

Successful Dealerships of the present and the future are completely immersed in Internet Sales, BDC and Digital Marketing, possessing either Internet or Business Development Centers. They buy and generate leads proactively to drive business to their dealership(s). They participate in a proactive approach. They do NOT wait for floor ups to simply walk into their dealerships and buy cars. They find the people to come into the dealership. They are where the people are…the Internet.

Evolved Dealerships understand:

• That 92-99% of Americans go online BEFORE they ever step foot into a dealership
• The average buying cycle is between 45-90 days. NOT 72 hours as was the reality 15 years ago
• Internet Leads are a FRACTION of the cost compared to traditional advertising. Specifically, NADA says that the average cost per sale in advertising is $640 per car. On the other hand, Internet advertising is approximately $200 per car.
• Conventional advertising is when and where people do NOT want to be bothered. On the other hand, Internet advertising is “on demand”. It is ONLY when and where people want to be engaged. On their terms.
• Digital Marketing is completely transparent. Every dollar can be tracked back to clicks, leads, attempts, connections, appointments, confirmations, appointments, shows and deliveries. Whereas traditional advertising is dubious and very difficult for tracking ROI.

What is next for the evolution of Automotive Sales? Through my experience through training, I have found the answer is in Automotive Sales Professionals themselves. Excitingly, they too are EVOLVING! Evolved Sales Professionals are taking the old saying “The Car Business Is Like Having Your Own Business” and putting it into play at a whole new level.

“Car Sales Is Like Owning Your Own Business” is as powerfully true as it is tremendously misleading! After all, words are just that, words…unless of course you put those words into action. But how can an Automotive Sales professional put those words into action if the Sales Professional isn’t properly trained on entrepreneurship? Most dealerships falsely mislead their Sales Consultants into thinking that they are trained Automotive Sales Professionals and entrepreneurs, which is NOT the case.  You do NOT own or run your own business if all you are armed with is the “Road to the Sale”, especially if you don’t even use it consistently.  

Truly evolved Automotive Sales Professionals have learned that to own your own business, sustain that business and evolve that business, you must:

• Have a Methodical “Road Map”. You must have a business model with a Plan A, B, C etc. You must begin with the end in mind. You cannot just show up to work and expect to sell 30, 40+ units per month by chance. You need turn by turn GPS precision guidance created via planning and preparation.

• Diversify the way you sell cars. You cannot expect to just live off of floor ups. You need to have multiple streams of revenue or multiple ways to sell automobiles.

• Understand that the Internet is the KEY to your success. Google’s ZMOT confirms how important and relevant the Internet is for ALL businesses. So, if you are in fact “Your Own Business”, then you need to be ALL OVER the Internet! Over 80% of ALL transactions start on Search Engines…

• An individual Sales Professional needs to think of him or herself like the dealership thinks about its Internet Sales Department.  Meaning that Sales Professionals need to emulate the strategy of the Dealership and even the OEM.  If an OEM, such as Ford (for example) has a full online division and specializes in:

• Search Engine Optimization
• Search Engine Marketing
• Video Search Engine Optimization
• Video Production
• Social Media
• Retargeting
• Online Reputation
• Websites
• Focus Sites / Micro Sites
• Blogs
• 3^rd Party Leads / Aggregators / Online Classifieds
• And more…

And then a Ford Dealership, ABC Ford, has an Internet department and duplicates their own digital strategy like the OEM, then it makes all the sense in the world for Sales Professionals to emulate the strategy of both their Dealership as well as their OEM. 

• Proactive Mind Set - Evolved Automotive Sales Professionals cannot wait for magic to happen, they must create their own results… proactively. The way a sales professional views the “sales process” determines the behaviors they exhibit and in turn directly determines their results.

• Must be methodical with “Follow Up” – With the average Internet prospect gestation period being between 45-90 days on AVERAGE. Sales Professionals need to become experts in:

• Inbound / outbound Phone Process
• Inbound / outbound Email Process
• Social Media Communication(s)
• Video Messaging (Skype, GoToMeeting, Video Email)
• Voicemail Communications
• Reputation Management

• Must Have Excellent Time Management Skills –

Entrepreneurs know that you must be careful of distractions disguised as opportunities. This reality is one of the most powerful concepts for evolved Sales Professionals to master. Poor time management skills kill a lot of careers in the automotive industry. There are too many Sales Consultants that work a “Bell to Bell” and get NOTHING accomplished. This happens because they do NOT know how to prioritize. They do not have a “Roadmap for success”.

• Accountability  - True professionals must hold themselves accountable. In order to hold themselves accountable, there must be checks and balances. There must be benchmarks, standards, projections, tracking and reporting.

• Must “Master Your Craft”- At the end of the day, it’s all about being the absolute BEST automotive sales professional you can be. In order to be the best, you need to master your craft. That means:

• Mastering your dealership’s “Road To The Sale” process
• Have AMAZING Product knowledge
• Be able to present FULL Features and Benefits and articulate “WHY” your brand is BETTER than ANY other brands in market
• Be able to articulate (passionately) What is your dealerships unique value package proposition (VPP)… “Why Buy From Us” package.
• Know how to PROPERLY qualify a prospect and identify their wants, needs and expectations.
• Have a thorough library of the TOP 10 objections as well as at least 5-7 STRONG rebuttals for each (That is 50-70 powerful word tracks in your arsenal).

All of my tips and ingredients for success listed above are derived in part from when I was on the front lines selling cars, as a “30-Car Guy”, and in completion from my post front line days as the CEO of a national training and consulting company. I evaluated my automotive experience as a whole and mapped out my formula that helped me achieve 30 units per month, over and over again. Then I modified that formula with the additional information and experience I obtained through working in diverse dealerships all over the country and overseas. I then took that formula and converted it to workshop form for dealerships all over the country, including state associations such as the Detroit Auto Dealers Association (DADA) and the Greater New York Auto Dealers Association (GNYADA).

Let me break down my philosophy for you:

As mentioned prior, a Sales Professional should not just show up to work without a methodical plan and just try to sell as many cars as possible without a defined plan. As Dr. Covey says (Author of the 7 Habits of Highly Effective People), You must “begin with the end in mind”.  That means that you should start by identifying:

• Exactly how much money you want to make in a particular month
• How many units you must sell to achieve that financial goal
• Where those units are coming from
• How you are going to sell all of these vehicles

Once you identify the “plan”, you must identify the “how” or the implementation. There are eight main ways an Automotive Sales professional can sell an automobile:

1. Fresh Ups
2. Be-Backs
3. Internet Ups
4. Phone Ups
5. Repeat Clients
6. Referrals
7. Service
8. Prospecting (The Lost Art Of Car Sales)

Unfortunately for the success of the automotive sales professional (and ultimately the dealership), MOST Sales Consultants only sell from 2-4 areas and some even from 4-6, but very few Sales Consultants engage ALL eight opportunities to sell an automobile.

Below you will see a grid that I created, which allows a Sales Professional to truly “Mind Map” their projections.

It breaks down:

• How many units you want to sell per month
• Where you are going to get those units from (within the eight categories)
• Exactly how many people you have to have in front of you, at the dealership, to sell “X” amount of units.
• It further shows you that in order to have “X” amount of prospects in front of you; you need to speak to “X” amount of people (in person or on the phone).

For example, if an Automotive Sales Professional wants to sell 30 units a month and generate over $12,000, how are they going to do it?

Firstly, you need to know the following variables:

• What is your pay plan? You need to not only know what it is, but you need to UNDERSTAND it as well, so you can work it to your advantage. You should identify: 
  • What is the commission percentage
  • What are the bonus levels / tiers
  • What are the bonus units
  • What vehicles have “spins” from the OEM
  • If there are any fast starts or power closing bonuses in existence.

• What is your AVERAGE commission amount? If you don’t know, develop an “estimate”. For example, $400 per car. That is the average, including all bonuses, spins, etc. in total at the end of the month.

• If you are solely on commission or a draw, then you need to calculate how many units you need to sell to earn $12,000.  With that end financial goal in mind, you need to back into the numbers:

• Take $12,000 divided by $400 = 30 units!
• Now you need to identify where you are going to get those 30 units utilizing the following sources:
  • Fresh-Ups
  • Be-Backs
  • Internet Ups
  • Phone Ups
  • Prior Customers / Orphan Owners
  • Referrals
  • Service
  • Prospecting

• Once you calculate where you are going to “fish” for your prospects, you need to calculate how many in dealership prospect engagements you are going to need to close those 30 units.

• After you identify the number of in dealership prospect engagements, you will need to calculate the number of people you need to “speak to” in order to mathematically get that amount of people in the dealership. Remember when I say “speak to”, I mean “communicate” with via:
  • Showroom up
  • Phone up
  • Social Media
  • Email Correspondence

• With that given number, you can calculate how many people you need to:
  • Call
  • Email
  • “Up”
  • Meet (prospecting)
  • Social Communicate / Network with

In the end, the right amount of “conversations” will result in the right amount of “in dealership” visits, which will ultimately result in the 30 units delivered, satisfying your “end in mind”.

Automotive Sales has evolved tremendously since the economic collapse in 2008. It was through Natural Selection that the “strongest” and “adaptable” dealers survived. The same evolution that was responsible for the dealership’s survival then has transferred to the newest evolution of the Automotive Sales Professional today. With that being said, I guarantee, if you follow the plan herein, you will be successful.

In my next article I am going to break my philosophy down even further and provide even more tactical strategies. Specifically in my next article, I will discuss how Automotive Sales Professionals can prospect utilizing advanced technologies and strategies that will empower them to truly “Own Their Own Business”.

If you have any questions about this article or if you would like a sneak peek of the information I will elaborate on in my next article, please feel free to call me at 267-319-6776, email me at sean@dealersynergy.com OR, please visit me at the www.internetsales20group.com