It was a good idea in its day, to create major sales events for the car industry focused on holidays like Labor Day. Then it evolved into being included in the Black Friday madness and now, ups walk in and expect an end-of-the-year clearance price just about every month of the year. How did such a good thing go wrong?
Car manufacturers have a better ability to absorb a loss without it damaging their profit line, but for many dealerships – staying viable with discount prices means losing good team members who are leaving due to lower voucher amounts. Here are a few ways to get the world back in balance and keeps your dealership thriving.
Everyone loves a bargain, now they want them on demand
Sales events are successful because people love getting bargains. The idea of “something for nothing” is both a warning and a desire in American life. All the end of the year clearances, Labor Day and President’s Day events have set up an expectation in the public mind that there are only select times of the year to buy. Since anyone can now go online and find the MSRP of a vehicle there is a limit to how high you can list a car and then bring it back down to preserve the profit margin.
The cavalry arrives on the shoulders of your F&I team member and your arsenal is hidden in the option packages. It may seem like nickel and diming to get by compared to the 80s, but this is a brave new world.
Playing the options
Trim and option packages still list out online with base prices but they are not as sure in consumer minds as the base sticker MSRP. Your advantage comes from being able to tell the customer that the base sticker is just that, a base model of the vehicle with no trim or other options.
You can wiggle with the MSRP within the range that is already cushioned, but you can be much firmer about the cost of the trim and option packages. The good news is that while many sites do list the base inclusions in a trim package, they don’t list all of what is involved. Padding out the trim can be away to make back the discount on the MSRP.
How do you retain a good sales force when vouchers aren’t what they used to be?
No matter what you do to keep the price viable, your sales force is going to notice that the vouchers just aren’t what they used to be. A good deal can leave the floor for F&I a pounder and resurface as a mini in the printed voucher. Rather than risk losing good people during lean times, look for other ways to compensate them.
Running quarterly internal sales promotions is one way, but that can engender resentment rather than competition among member. Better to play the card of personal recognition and reward with team members. The more a team member feels valued by you, the harder they will be willing to work.