As September approaches dealers are scratching their heads thinking about how to encourage sales, which have been affected by various events. Last year the scrappage scheme was in full flow and was being marketed very well by the government and for many dealers it basically led to a procession of what we in the trade call ‘hands up ‘ customers coming into the showrooms and signing on the dotted line.
The volumes achieved therefore masked the underlying situation which was bound to happen once scrappage ended i.e. we are still in the middle of a period of economic uncertainty and, with factories around the world having reduced production and losing staff, it’s made buying a new car and having it delivered in a reasonable timeframe almost impossible in some cases.
Dealers are telling us that taking the scrappage scenario out of the equation the order bank is not disastrous for the remainder of 2010, however because of the extended lead times – sometimes as long as 6 months – September has just not “happened” so far.
A sales manager we spoke to who represents a franchise for a German manufacturer said that normally in the build up to a plate change month he would expect to have 50% of his target ‘in the bag’ and hopefully complete the target throughout the month but this year he has barely reached 30% and has a mountain to climb to achieve his budget.
Now in our experience this isn’t necessarily a disaster, especially for buyers, as manufacturers tend to react with some fantastic dealer incentives if they see the month slipping away which can be very beneficial to buyers looking for a great deal but not necessarily the exact new car they wanted.
This brings us onto what we think is the most interesting problem facing dealers today. A mixture of scrappage, staff redundancies and the factories scaling back production has lead to the situation we are in now, whereby sales personnel who may lack the necessary experience are struggling to ‘switch’ customers into a different car when the original choice may mean an extended lead time.
As one sales manager told us these sales people are ok if they have what the customer wants but asking them to actually try and sell something different and they really haven’t a clue.
This may be a little harsh but it does question whether in the industry’s quest to recruit people who can fill in forms, tick boxes and follow process, whether having a salesperson with an engaging personality and some great communication skills not to mention a desire to succeed and earn good commission may be costing sales.
If a customer enters a showroom with a blank canvas having decided he likes the look of a particular car it can then mean a sales person can establish what car may best suit that buyers needs and hopefully locate a suitable example, however if the buyer is absolutely set on what they want it is a lot more difficult for a salesperson to try and offer alternatives. Add to the mix the fact that customer may have to wait 6 months to have his car delivered he will either buy another make or the salesperson can use the opportunity to promote the benefits of having a different model which can be available in a more acceptable time frame.
That in essence is the art of selling; the customer having compromised on certain things gets a good deal and a car when he needs it and the salesman has regained a sale which he may have lost without applying the effort and skill to convert that customer into a viable alternative.
The situation will certainly need addressing so that when production issues are resolved, and stock becomes more easier to source, sales people have honed their skills in order that the same disciplines are in place to avoid having the dreaded tag of just being an ‘order taker’.