The past couple of years have brought unprecedented circumstances to the automotive sales environment. The stock supply issue experienced across the board has created a “seller’s market” unlike anything we have seen for a long time. The basic economic law of supply and demand has played out in the dealer’s favour here – gross margins and closing ratios have been off the charts for most businesses across Australia.
The only real issue has been managing customer expectations with long lead times on delivery and the fact that most of the dealer profit is “on paper”. Gross margin only translates into real profit when a vehicle is delivered.
So how have these distinctive market conditions impacted the skills and behaviours of your sales team? Over time, the sales team has become confident in their abilities, but this confidence has led to complacency due to the comfort of operating in a seller’s market. In general, there is a decided lack of impetus to win the customer and a lack of quality in the execution of a tailored customer experience. Unsold customer follow-up rates are inversely proportional to closing ratios – they have fallen through the floor!
Also, consider any new sales consultant who has started in this uncommon environment. They may have never experienced the need to work hard to win the customer or been exposed to a highly competitive marketplace. This means they may not be prepared with the skill sets they need to respond to evolving circumstances.
When “What’s your best price?” has been replaced with “If you can get me a car, I will buy it” the core selling skills required are naturally eroded over time.
The dictionary defines atrophy as a “gradual decline in effectiveness or vigour due to underuse or neglect”. It’s hard not to consider that a state of atrophy is, to some degree, taking hold of the sales team. The skills they have not had to exercise are falling into a state of decline or lacking the effectiveness they once had.
But the market is shifting. The balance of power is shifting back in the customer’s favour as stock becomes more readily available. Another issue is the significant number of customers choosing to cancel existing orders as alternative vehicles become available earlier – while dealers can only sit back and watch as gross margins evaporate before their very eyes. Excess stock will only serve to further augment the shift back to a market that favors buyers.
Every sales manager needs to have an honest look at their sales team and consider the true quality of what they are currently delivering to customers, in comparison to the market trends.
Execute a customer experience with the highest level of quality
Build rapport and develop a trusting relationship to win the customer
Effectively consult customers on their driving wants and needs
Respond to objections in a customer-sensitive way
Focus on the details to make the customer journey stand out from other dealers
Tailor the product presentation to create a connection and point of difference
Diligently follow up on unsold opportunities, rather than wait for them to happen
As the conditions shift back to a buyer’s market, the critical question is how do you get your sales team ready and prepared for the shift? The writing is on the wall; it’s what you do with the message that counts.
Now, more than ever, getting back to the basics of selling is critical for your team to regain the competitive edge as the pendulum swings back in the buyer’s favour. The unfortunate fact is that a little ad hoc coaching on the job won’t give the team what they need to get back on the “knife’s edge” of selling; nor do most sales managers have the time to dedicate to doing this well.
Training needs to be structured, focused, and deliberate to have any real cut-through or resonance with the team. Knowledge needs to translate into real-world skills and performance. Sharpening the team’s skill set now is vital to keeping your business aligned with this movement in the market.
Fusion Business College offers a range of learning options, from self-paced online programs to bespoke tailored solutions, to get your team back into shape and ready to respond to the shift. Training isn’t always about learning new skills – it’s also about remembering and revitalising the skills your team may have forgotten