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Comment by David Ruggles on September 12, 2013 at 10:48am

There are always consumers that are pains.  Children are pains.  Not calling it what it is doesn't change anything. 

RE: "If the dealership that a person is working at doesnt warrant the culture you are looking for nor the service that you want to represent, then we as salespeople have options to find one that does."

I have a better idea.  Get your own store and run it the way you want.  The realities of the market will get your attention quickly.  As a sales person, you don't get to run your own race.  Your run the race your boss wants you to, or you keep shopping for someone who you like. and hope they don't change their business model away from yours. 

One thing you learn as a boss.  If you disclose your proprietary information, it quickly comes back to bite you.  If sales people know your bare costs, they will figure out a way to give it away.

Comment by Marsh Buice on September 12, 2013 at 10:36am

David, I have to disagree with the Gen Y's-they're not a pain in the ass, they have different motivations. I'm sure growing up the generation ahead of us looked at us as a pain too, but they are our customer today and forward. I'm a silver lining kind of guy. I believe the best in every situation and every person until proven otherwise. You don't need a title to make a difference in others. If the dealership that a person is working at doesnt warrant the culture you are looking for nor the service that you want to represent, then we as salespeople have options to find one that does. There's many ways to the top...it starts with each one of us choosing to run our own race to make a difference in someone or something. the only thing I focus on are the things I have complete control over: my perspective, attitude, and my decisions that lead to actions. I love this biz and will do all I can to help others find their path. It's up to us to make this a great industry.

Comment by David Ruggles on September 12, 2013 at 12:31am

RE: "You could line up 5 people and show a price on the same unit and every one of them would perceive the price differently."

Exactly.  And they would all have different credit scores.  Some would be upside down in their trade.  Some would have unrealistic ideas of what the trade is worth.  etc. etc.  Which goes to show that one size doesn't fit all. 

RE: "Transparency."  The word is overused.  It means different things to different people.  We DO have something to hide.  Dealers have something to hide from sales staff.  Absolute transparency leads to an "efficient market," something consumers think they want.  Dealers and sales people don't.  An efficient market means the product has been reduced to a commodity. 

But if YOU are something special, and you can sell that, and you are still available from the last vehicle the customer purchased, you have something going for you.  But that makes you, by far, the exception to the rule. 

For Gen Ys to be loyal, they have to grow up.  They don't know the business world yet.  Most don't have a fast track credit history and don't understand why there is time to be spent putting together a car deal.  They have been raised to think they can do everything on line.  So they DO spend less time at a showroom because they spend so much time online first.  Many consumers would like to be loyal but with the turnover in sales staff and the barrage of new products from so many directions, it ain't happening overall.  There are many people who would tell you how to sell a car.  If you want to make money you do have to build value when your consumer will let you.  These days consumers are Internet enabled and use the web to negotiate the deal.  This is the trend that many vendors don't want to tell you about, despite the fact it is going on big time.  They want to sell you a lead with the idea that the consumer will come to the showroom for the conventional close.  Increasingly they come to the showroom to gather more information, then leave to use the Internet to negotiate the deal.  They feel they have an advantage that way.  They can get dealers to bid against each other by email, chat, text, or whatever, without having to visit dealership after dealership.

The reason Gen Y is important is because they will buy cars for a lifetime.  Its the Ronald McDonald principle.  Currently they are a pain in the ass.  But they will grow up and buy cars the OEMs actually make money on.  Dealers?  That's another story.  As OEMs press them for higher overhead costs, information between buyer and seller is evening out, putting downward pressure on gross profits. 

As far as the new breed of managers are concerned:  I will believe it when I see them actually out of the store attending real auctions.  Most I see just don't understand the used car business, the heartbeat of it all. 

Comment by Marsh Buice on September 11, 2013 at 10:09pm

I don't agree with "One Price" either David, bc value is perceived in the eye of the beholder. You could line up 5 people and show a price on the same unit and every one of them would perceive the price differently. I think education and transparency is key but transparency has gotten a bad wrap. Transparency doesnt mean "not for profit" it means you have nothing to hide and have materials and facts to help support your prices. Dealerships have created a culture to race to the bottom and give everything away-which explains why it is challenging to keep good talent in the biz bc they are making $50 minis. I believe in commissions because I think it causes sales consultants to work harder at perfect their craft and hone their skils. The NFL doesnt pay all of the linemen the same, each one commands a diff pay based on what they bring to the team in return. Customers will pay for service, but we have to first believe they will and then provide the level of service we promised we would.

 That is the problem, many managers don't believe they can ask for it and so they never get it. I ask my kids all the time, "what do you get if you never ask...NOTHING." We have to use intelligent pricing and negotiate from a position of strength not weakness. People are buying me for $40k I just throw in the car for free :)

Comment by Marsh Buice on September 11, 2013 at 9:54pm

David, I think the Gen Y's are going to be loyal too-they're just not going to want to spend hours to buy a car nor go back and forth with negotiations.  I think the salespeople/dealerships that adapt to the way they like to do business (via text, vmail, and tighter transactions, etc) will do well. Because we've identified them, they will identify with us as someone who thinks like they do and will return to do business-as with any relationship, we can't take it for granted, they do have more options than ever before. . Many villianize Gen Y's as having no loyalty but I disagree. They think differently than we do-we just have to find out what makes them thirsty and provide it. 

OEM's won't get it and probably never will bc if they could figure out how to sell cars they would do it themselves. We don't know what it takes to build cars and they don't know how to sell them, but somewhere in between we could make it work if we would listen to each other...unfortunately we are all pointing the finger and blaming each other so it will probably never happen, but boy if it did :)

 Be encouraged David, there is a young breed of Mgrs coming up that think different. We can't wait for the OEMs or our managers to "get it" we have to get it and hope they got it. The train is moving, those who are adaptive and have a heart to change those they lead will pave the way for a better industry. I love your insights brother, thank you for taking the time to write them.

Comment by David Ruggles on September 11, 2013 at 9:24pm

A little on "price."  The attempts to do "One Price" are many.  One doesn't prove anything with anecdotes.  One Price works when demand outstrips supply.  BUT simple arithmetic provides insight on why the largest attempts at One Price failed miserably, lead by the ill fated "Ford Collection" that lost hundreds of millions of dollars for Ford Motor Company.

With "One Price," a dealership gives away gross profit without even being asked for it.  The theory is that enough consumers will appreciate the initial discount and take the time to listen to a pitch on how the One Price Dealership provides extra value over the price butchers.  After all of that, they enter into a negotiation on the value of any trade ins.  These dealerships turn down any offers below the One Price to maintain credibility with their own staff, as well as their customers.  It is these consumers who usually have the highest credit score and can buy anyway.  These are the consumers who take the "One Price" and use it to shop with.   These are the sales that provide a dealership with the extra units to penetrate the market.  Without them, the dealership is under attack from the OEM for lagging market share.  Giving away gross profit out of fear of the consumer while passing cheap deals out of pride and principle isn't a successful business plan for a dealership in today's world.  Dealerships that practice artful negotiation with sales staffs that are around long enough to do repeat business are the one's poised to succeed.  Even then, pressure from the OEMs to "upgrade" facilities is the "wild card."

Comment by David Ruggles on September 11, 2013 at 9:14pm

RE: "Like many, I am willing to pay and return to those who offer me superior service."

There are certainly a percentage of those.  It depends on the brand, the age group, and the income level.  However, one thing I learned when I broke in to the business is the worst thing one can do is to judge everyone as if they think like I did.  Thinking that, I set out to beat everyone else's price, thinking I could make it up in volume, the common error of the new and inexperienced sales person.

The demographics most likely to be loyal is baby boomers.  The least likely is Gen Y.  None of this is helped by the fact that our industry turns sales people over about 3 times each year.  I know sales people who have been selling for 40 years.  Yes, they have no need to take fresh UPs.  Their sales managers work for them, not the other way around. 

Talking about the "long game" is great IF we can get OEMs and Dealers to buy in.  If they do, things will change.  If not, it will be more of the same.

Comment by Marsh Buice on September 11, 2013 at 6:42pm

Pat, brother you rock!! I love the analogy of short game vs long game and agree with you totally!  Contrary to our belief it's not about the price until we don't follow through on our promises. It's no walk in the park what we do-it takes a tremendous amount of mental energy and juggling of responsibilities, but if done right, it is incredibly rewarding. Can I get an amen? :) Thanks Pat for reading and commenting.

Comment by Marsh Buice on September 11, 2013 at 6:20pm

David you make a good point and I call those customers the "20 percenters" Those are the ones that don't care what, where, and who, they buy it from-the other 80% is where we need to focus our energies. When the 80 percenters invest in us, we have to make sure we create a relationship so strong that they feel they would be cheating on us if they leave and buy from somewhere else.

There are those out there that say loyalty is dead but I disagree. Like many, I am willing to pay and return to those who offer me superior service. I don't want to focus my energies thinking "what if" they leave, instead I want make sure I do all I can to make sure it never creaps into their head. Thanks David for reading and sharing your thoughts.

Comment by Pat Kirley on September 11, 2013 at 6:10pm

I agree with Marsh, some of the time we are like poloticians, we just want to win and then we move on. This a long game and if you play the short game you will constantly be looking for new business. The long game is more satisfying and profitable. Sure some customers will not appreciate your efforts until they buy from a short player and have a problem. I'm not the cheapest, my cars are little more expensive but better prepared lower miles and a better service. Do I get repeats yes a lot, I just try to be better all the time

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