Monday, December 03, 2012

Car Salesmen Don’t Look or talk Like Car Salesmen Anymore



Many of my readers know that I send mystery shoppers weekly to car dealerships around South Florida so that I can learn how they are selling, leasing and servicing cars. I do this for two reasons. The first is that this is a common practice for all businesses to learn how their competition operates and to have the competitive edge you really need to know how your competitors do business. The second reason is that I feature a mystery shopping report on my weekly radio show, Earl Stewart on Cars that airs between 9 and 10 every Saturday morning. I've done hundreds of these mystery shops and I've noticed an interesting trend over the years.
Back in the day, car salesmen looked and sounded like what many people consider the stereotype for a car salesman. You know what I mean, gold chains, diamond pinkie ring, sunglasses, loud shirt, and white shoes. As car buyers became more educated, sophisticated, and demanding, it didn't take car dealers long to realize that they had to dress their car salesmen in a nicer fashion, “lipstick on a pig”, But even though they looked nicer, they sounded and acted pretty much the same.
With the advent of the Internet, Google in particular, today’s consumer has made a quantum leap in knowledge, education and sophistication. Today’s buyer of virtually everything is far more demanding and far less tolerant of deceptive advertising and sales tactics.
The most recent shift I've seen in car dealers’ efforts to make their salesmen seem less threatening is in who they hire and how they train their salesmen to behave. More and more car dealers are hiring younger sales people, and fewer older, experienced salesmen. These dealers want their sales people to treat their customers with courtesy and respect and gain their confidenceWe've all heard the terms con man and con-artist. We also know the verb, to con. To con somebody means to steal from them as in Bernie Madoff. Did you know that “con” is short for confidence? A successful con man is good at gaining the confidence of his victim. The con man’s appearance and how he sounds play a critical role in this. I often hear people who were taken advantage of and stolen from say, “He looked and sounded like such a nice person”. Think about that for a minute. How successful could a crook be who looked and sounded like one?
The important thing to remember is that it’s usually not the car salesman who is responsible for the deception. Certainly he cannot be held accountable for the deceptive and often illegal advertising. In fact, many car sales people hate the advertising that brings prospective customers into the car dealership by false and misleading promises.  Especially in today’s economy, many people work in car dealerships because they can’t find a job anywhere else. Imagine how embarrassing it must be to salesman, new to the car business, when he must try to explain away a bait and switch advertisement. How can you tell a prospective customer that the “sale car” on the showroom floor costs several thousands of dollars more than the one advertised on TV? In my mystery shops, it’s becoming more and more common for the salesman to “nicely” tell my shopper when she asks to see the advertised car that they can’t really buy the car for that price and to apologize for the deceptive ad! These sales people will say right up front that the ad is just to get you to come in so that they can try to sell you a car at higher price.
Also, the salesman is often an innocent victim when it comes to the deceptive sales practices. Many car dealers use attractive, friendly sounding sales people to lure the fly into the web. It’s been proven in studies that customers put more stock in the individual they deal with at a store than the store itself. If that salesman can capture your trust and especially if he can make you like him, the car dealership is 90% closer to closing the sale.
Today’s sales people are really more “greeters” than sales people.  Many car sales people today are not privy to the cost or even the selling price of the cars they “sell”. The true cost of the car is known only by the sales managers who are also known as closers and team leaders. These managers are also the only ones authorized to quote a price. They also appraise your trade-in. The interest rates you pay and the warranties, maintenance plans, GAP insurance, etc. that you buy are all handled by mangers.
The bottom line is that it’s not the rude, aggressive car salesman you need to be afraid of. There are very few of those around anymore. The car dealers have wised up and you will be dealing with young, attractive, non-threatening, and polite sales people today. In many cases, they know very little about the unfair and deceptive sales and advertising. What little they do know makes them feel bad but they need the job and want to put food on the table for their family. As much as you like this salesman or saleslady, don’t give him or her your trust when it comes getting a fair price, trade-in allowance, lease payment, or interest rate. That nice, smiling sales person is the dealer’s pawn and is “just following orders”. Verify all of the numbers your new friend gives you by competitively shopping and comparing at least two other car dealers.

8 comments:

  1. Well this is ridiculous. As a sales person, I'm offended to see articles such as this. No car salesperson can rip you off anywhere. At least not here in Canada. Worst case... you're paying M.S.R.P. .... is that really so awful? The markups are miniscule to begin with. Customers with car cost, on top of it, want even more money off? Where do you get the nerve? You don't go to buy food at a restaurant and complain the ridiculous markups that they actually have are huge, do you? No, in fact, you even tip the waiter an extra 15%. It's ridiculous.

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    1. Sorry I take my comment back. I was wrong. After going back to finish my highschool diploma, I now realize that MSRP is suggested only (I didn't realize that S stood for that), and the dealer is free to adjust their pricing up/down as they see fit. I also now realize that the usual profit of 6-8% is roughly $2,000+tax, which is quite a bit especially when compared to my paycheck. I now see why customers will spend the time to haggle and research and shop around to make sure they get the best price. I also now realize that an automobile depreciates over time, so it would be unwise for someone to pay full price just before the new models come out, hence the need to reduce the printed MSRP. I was wrong, please forgive me.

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    2. Gee go figure. The average profit is 6-8% that is to keep a nice facility running, pay the light bill, pay the lady at the reception desk to answer all your calls when you need answers, pay the ladies that transfered all your papers so you didn't have to go to DMV, etc. Do you realize restaraunts charge 10-20% profit, and jewelry stores are even more. Nowadays you have options to go to other stores. It is THE MOST UNLOYAL BUSINESS OUT THERE. I have lost customers who I spent hours with to a couple hundred dollars difference that some other dealership offered. MSRP is what you should PAY for the car. A $40,000 car is actually WORTH $50,000. MSRP is a point of comparison just like gas mileage. The MSRP HAS to be competitive, or else you could lose a customer before they step foot in a dealership. There is no deceptive practice that needs to happen, ultimately these people WANT new cars. So they buy them. You have the choice to buy or not, it is up to you. You don't want to at that moment go walk! We don't care, it's just like a casino we want your business but we know you will be back. If you provide a great product that you believe is best for the customer, that has the ability to save your LIFE because of the safety features, etc. you really can't put a price on that. If you would like to, then who is the deceptive and inconsiderate person?

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    3. I bought the car, so leave me alone when I come back for service or warranty work and don't try to get me to "upgrade" or trade a car that's only a year old. I know where to find a salesperson when I need one. It isn't the public's fault that your dealership can't meet expenses. No 40,000 car is worth 50,000; no one has ever sold a car for more than they paid, there's this thing called depreciation....

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  2. Dear anonymous car salesman,

    Your response to my blog article is so typical of car salesmen, that I will be posting it on my Facebook page, www.Facebook.com/EarlStew.

    First let me say that your statements about the average profits of car dealers, restaurants and jewelry stores are grossly inaccurate, but that’s not the point I want to make in my response to you.

    You’re attitude about your customers is what’s wrong with the retail automobile business today. You are complaining about your customers’ lack of loyalty and blaming them! The cause is YOU. My customers are very loyal to my sales people and my dealership. We don’t believe that we are “entitled” to our customers buying a car from us because we spend a certain amount of time with them and because we have an overhead expense we must cover. You attitude that this is true is OUTRAGEOUS and just plain STUPID!

    What are you “smoking” to make a statement that car buyers “should pay MSRP for the cars they buy?” You say that your customers should buy from you because you’re selling a “great product” that will “save their lives”. You may be selling a great make of car and it may be very safe, but so are thousands of other dealers that sell the same make. Customers buy from the dealer of that make that they TRUST to give them a good price and treat them with courtesy, respect, and integrity. That’s where you and others like you in the retail auto business drop the ball.

    In a nutshell, you don’t like your customers and you don’t trust them…Guess what? That’s why they don’t like and trust you, and why they buy their cars from me and other car dealers like me that “get it”.

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  3. Earl Stewart, your perception of the auto sales consultant is a bit... 1950's... Your ideology behind sales consultants being snakes is that of a 80 year old who got screwed over by a car salesman in the 1950's and 60's. I put it simple to my customers, if this is the car you want, and you feel comfortable buying it. Then buy it. If you dont know if this is the car you want, dont buy it until youve shopped around. Would I love to sell a car to everybody? OF COURSE, but i dont want to sell a car to someone who is going to bash the car they just bought and drive away future customers. Case and point, I want people who want that car to buy it from me, i dont want to pressure someone into buying something they dont really want. Sorry youve been screwed over, but at the end of the day. You can only screw you when it comes to purchasing decisions.

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  4. Dear anonymous car salesman, congratulations on being an honest, ethical car salesman. I never said that sales people and dealerships like you and yours don't exist; but unfortunately they are in the minority. Google "Gallup Poll on honesty and ethics in professions" and you will find car sales people at the bottom of the list. You will also find that they have remained at the bottom since this poll began, 37 years ago. By the way, I didn't form my opinion from buying cars; I've been a car dealer for nearly 50 years and I know of what I speak.

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  5. I have found that the perception of the average car salesman can be your biggest tool in the business. My dealership is in a town of about 20,000 people. We are not in huge city where we can sell a vehicle to a person and never see them again. It is our reputation that keeps the doors open. By going to get customers vehicles when they are in need of repair and giving them newer models to ride in while their vehicle is in the shop makes a huge difference. If you show your customer you care about them as a human being and not just a number you will have huge amounts of return and referral customers. My family has owned car dealerships for more than 30 years and I am proud to say I am a car dealer.

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