On the front line – Can new car showrooms turn the corner?

Even though showroom traffic is holding up well this week, I was still surprised to see on my travels that sales teams are displaying a rather lacklustre attitude towards their customers. I was visiting several franchised dealers across London and the south east in the guise of a customer who is responding to the headlines about new ‘carmaggedon’ I was hoping to find a great deal but more importantly a great car and service.
In truth I came across a mixed bag, as I expected, where the good were very good and the bad—well I wouldn’t employ some of them to sweep the showroom floor let alone talk to potential buyers about their car needs. This I guess is probably representative of most retail businesses; a mixture of good, bad and indifferent, however the variance was amazing. In one case the receptionist saved the day plying me with coffee and cheery goodwill not knowing that I was well aware she was buying time before a sales person became free. In fairness it was great to see lots of customers present and when I did get served, although the process was somewhat hurried all my details were collected and all my questions answered with skill and enthusiasm and in that particular case where I really considering buying a car I would certainly re-visit the showroom. I will not ‘name names’ in this piece because MTI have asked me to carry out this research for an overview of any changes in the business since the new car downturn began. With my own background in Sales Management over many years I decided to base my findings on the following simple criteria;

A) How was the overall experience?
B) Would I buy a car/recommend?
C) Were the people and processes right?

I was particularly interested in researching buying a new car because the used car market seems to be more than looking after itself at present and in order that the industry gets back on track, selling more new cars is a key element of recovery.

So following is a snapshot of the good things and the bad things I encountered on my travels that day.

One dealer was great at the fluffy stuff and certainly made me feel welcome but the sales guy needed a bit more training in his product and also forgot that from A and Z there is usually quite a bit to do in between, before we get to the attempted sales close!

Another immediately offered me a 10% discount before I had even asked for one and although the car he showed me was attractive I was a bit put off that this seemed to become a take it or leave it offer lasting today only, I thought these tactics were somewhat old hat in today’s environment.

At the desk next to me I heard the salespeople talking to a middle aged couple who looked like they needed a little extra push to convince them to buy the car and I chuckled to myself when the salesman did the old “I will go and see my manager and get the deal sanctioned” if they were prepared to commit now trick! I was only surprised he didn’t ask to take their credit card to convince his manager to do the deal, and I smiled knowingly when he came back blowing his cheeks and pretending to agonise about allowing this ‘tight’ deal to be completed. I had visions of him and his manager looking at a sports website and laughing together whilst pretending to work out figures for the exited couple when in reality the deal had been agreed in their heads long ago. You see it’s all about perception, if a customer thinks that they have had to really negotiate hard to get the deal they want they will be far happier when they leave.

Another customer looked around the showroom and asked his salesperson was there really a recession? The showroom was packed to the rafters. Of the 6 dealers I visited 4 offered me a drive in a demonstrator and of those only 1 of them had the exact model I had enquired about. The other 2 tried to re-arrange me for another day based on the fact they both had prior appointments.

I saw at least 2 customers who’d had enough of waiting to be served and promptly walked out in disgust never to be seen again. Conversely the dealers who had employed a showroom co-ordinator managed to juggle all the customers waiting by at least giving them brochures to look at and keeping them informed of when someone would become free to assist them. One salesman I saw seemed only interested in prolonging our meeting if I would agree a deal on the right car and that I would buy it today, not in my opinion the way forward when trying to encourage more people back into the dealerships and new cars. Although there seemed to be 4 or 5 different customers browsing there was only 2 active salespeople on the floor and the lack of management was obvious.

Whilst I only had a snapshot of these businesses I would have thought that having a showroom presence was paramount in making the comeback a reality. All in all of the 6 dealers I visited If I was a customer I would say that 4 of them gave me a positive experience and would definitely be in the running to sell me a car, 1 would have to try a whole lot harder and employ more staff and 1 would have no chance unless the sales team was increased and improved.

In my view there is some real effort being made to attempt to sell more cars and show the car business in a more positive light. Excellent product knowledge and sales process skills are key and will ensure that customers, whether they buy at that dealer or not, at least take way a good experience. In other words the majority of the dealers in my small snapshot were doing everything to convert my enquiry into a sale, and with used car values on the up it was certainly easier for these dealers to offer a much more competitive price for my 4 yr old 3 series BMW.

I actually heard one customer, when being offered a price on her trade-in, say something I have only heard probably a handful of times in my career;

“As much as that? I thought it would be worth much less!’’

Out on the front line some new car showrooms are fairing better than others, which is the same story for manufacturers. Product knowledge and strict adherence to the sales process will end up making the difference.