Let them Buy!
F&I – Menu Buying not Menu Selling. Solving the salesperson’s dilemma
We love to BUY STUFF. Boy, do we love to BUY STUFF! (You do, too, right?) In 2011, US consumers bought $10.7 Trillion dollars worth of products and services.(1) And 27% of those purchases were made with borrowed money.(2) In our business about 75% is captive finance (lease and or financed at the dealership) and 10-15% more is financed alternatively outside the dealership.
Of course we buy stuff that we need, but we also buy stuff that we WANT. Often more of the latter than the former. Do we NEED:
• The 60” High Definition Plasma TV, plus the $200+ cable bill and HDDRV @ 14.95/mo that comes with it?
• The iphone and or ipad with the monthly service of $100/mo?
• The S Class Mercedes or the loaded Maxima when a Smart Car would fill the need for transportation?
How strong is that urge to satisfy the WANT? When you add the interest consumers will pay on the loans and credit cards, the result is eye-popping. Americans are happy to pay 15% to 25% over the price of what these goods and services are worth – with money they will not have until tomorrow – just to satisfy that WANT.
But here is the paradox. Consumers who love to buy hate to “be sold”. (Put on your consumer hat and I’ll bet you don’t like it either.) As salespeople, that paradox becomes our dilemma Our job is to SELL STUFF or so we may have been led to believe.
Why, in a very mature industry, do we still feel the overwhelming need to “sell” the client service contracts and ancillary products when we are all better served by helping them to buy? Think of “The Box”, not as a desk with chairs on opposite sides, but as a yard with a fence down the middle. Both the client and the salesperson want to wind up on the same side of the fence (the desk). Instead of laboring to push clients over the fence, we should be taking the fence down, allowing them to willingly walk over to our side, which is really where they want to be. Let’s look at the tools we use to do that.
Best Practices for helping clients to buy include:
• effective F&I Interviews,
• comprehensive menu presentations and, oh yeah
• a solid close.
Value of interviews:
Clients will (almost) always tell us what they WANT and, sometimes, but much less frequently, what they NEED. In many cases, they may not always realize what they NEED.
Question – Why is it important to uncover their NEEDS?
Answer – NEEDS can be converted into WANTS, often with little effort on the salesperson’s part and, often, the client will make that conversion with no additional help from us.
We start the conversion by asking questions. That’s the very first step.
Imagine, for a moment, your next visit to the Doctor goes like this. The RN escorts you from the waiting room to the examining room (THE BOX), doesn’t ask any questions, (like, “Why you are here today?”), doesn’t check your temperature, heart rate, pulse or blood pressure nor even ask you to climb up on the examining table. The Doctor comes in, briefly scans your paperwork and says you need a heart transplant because it might break down. How fast would you say no?
Let’s bring this example home. Here are two scenarios.
1. You tell the client he/she should purchase an extended warranty to protect against the cost of repairs that might be needed after the factory warranty expires.
Question – How many clients, who did not already WANT an extended warranty, would purchase the extension simply on the basis of your offering?
Answer – History tells us that 10% of the people will buy anything.
2. Through planned questions, you are able to determine, for example, how long the client typically keeps a car, how long he/she plans to keep this one ‘in the family”, how many different drivers, their ages, percentage of use, anticipated annual mileage, nature, number and geography of trips, the driving styles of each driver and so on.
Question – With that information on the table, how many of those clients would be better-positioned to convert those previously unrecognized NEEDS into WANTS?
Answer – History, again, suggests that number is closer to 30%!
F&I interviews are not new, but, by no means, are they standard across our business. Truly effective interviews are even less “standard”. How can you make attractive recommendations for products and services to protect against “the perils of ownership” if you don’t know enough about the client and his/her needs? Knowledge is power and that power comes from interviews that allow you to create compelling reasons for products in F&I without being pushy or forceful.
In 2013 most everyone has a menu “in the deal”. Does this mean that your F&I is actually “Menu Selling”?. The truth is, most are “Step Selling” but using a menu to do it.
Question – What’s the difference?
Answer – Step Selling is much like herding cats. The harder you try to force them to go where you want them to go, the more they resist and the less successful you will be. One thing is for sure: the cats don’t like it and neither do your clients. On the other hand, Menu Selling offers clients a variety of options along with your expert guidance to help them make their own best choice. You are not SELLING: they are BUYING. Presenting value and all the options, is in fact allowing them to buy.
Self-Exam – Do you believe your finance department is allowing your clients to BUY from your dealership? If clients are not consistently buying more frequently that 10% of the time, the answer is likely NO! (It doesn’t matter if you have convinced yourself that the menu is in the deal, under 10% and it’s more likely than not that they are not MENU SELLING. Don’t believe me! Well 10% of the people buy anything, right?
Your opinion on products doesn’t matter either. I recently received a call from a “new” F&I Manager about pre-paid maintenance. She said, “Chuck, I can’t sell this product. It breaks out to like $60.00 per oil change and they can get one for $34.95.”
“Stop selling” I counseled her. “Do your job and present the options on your menu, allow the customer the opportunity to say, yes, and ask them to make a selection. Leave your opinion out of it. Don’t pull. Don’t push. Just present the options and guide.”
The result? The month before our conversation, she finished with 0%. The month after, 14%! and that was her Ah-Ha moment.
Should we totally forget about traditional selling? Forget about uncovering objections, overcoming objections and closing? Of course not. We hold it in reserve for use when, after the first pass through the menu, the customer decides NOT to buy. We should feel free at that point to remind the customer during the interview, “Remember, you told me …………?”
Look closely at your less than 10% products. Video tape your manager’s presentations and review it with them. Are they selling or are they allowing the customer to buy? You will know the difference when you see it. The proof will be in your results, PRV and product index. Don’t allow selling to get in the way of a customer’s buying. Take down the fence that separates you from them and watch how quickly they come over to join you.
Vice President & Head Coach
APS Dealer Services