TRANSCRIPT: This Short and Sweet video lesson from Steve Stauning is titled Manager TOs. TO is a term used in the automotive space that refers to a situation where a manager would get involved with a prospect who has not yet bought. The sales person will “turn-over” the prospect to the manager. This usually happens when a prospect is pissed off. They may have asked for their keys to leave, at which time the sales people are instructed to hand the prospect over to the manager. The manager acts as a cooler to help the customer stay on the lot in order to eventually sell them a car.
Most dealers, in fact every dealer I have ever worked with, has what is called a one hundred percent manager TO policy. This means that no one leaves the lot unless they talk to a manager. The reality is that very few dealers really enforce this policy. There are many reasons for this, but the main reason is because managers don’t really want to talk to pissed off people all of the time. In fact, no one does. Who wants to deal with someone who has gotten so fired up about a car deal that they are ready to walk away and punch anyone who gets in their way? So managers have really shied away from doing the TO.
What I want to talk about, and what I want dealers to start doing today is to start doing the TOs one hundred percent of the time, but start doing them early in the process. Don’t wait for a prospect to be pissed off. Go in and do what we call a fly-by. Do a manager TO around the time of the meet and greet or right after the demo drive, but don’t wait until the prospect is upset because it is not fun for anyone at that point. Another reason to do them earlier is because when you do save those deals after the prospect has been upset, it is usually at a lower gross and with a lower CSI (Customer Satisfaction Index). All of the OEMs grade their dealers on the CSI. So, why do you want to get crushed on your gross profit, crushed on CSI, and do this manager TO later when you don’t even want to do it at all?
Research has proven that if you can get managers involved earlier in the process, you are going to sell more, and you are going to sell more at higher grosses. Here is why: When a buyer and seller are strangers, as they are with most car transactions, they show a propensity to define prices in a bargaining process. This means that they want to bargain. The seller has a price, whether it is MSRP or the first deal that the dealer presents to the prospect. Whatever it is, the buyer is ready to negotiate. The dealer could give them the very best price in the market. In fact, most used cars today are priced to market, meaning they are priced very close to their selling price. They are within a few hundred dollars, so there is not much room to negotiate. But because the buyer and seller are strangers, the buyer puts a different value on that vehicle. The dealer might have a seven thousand dollar vehicle that really is worth about seven thousand dollars. They have got it priced at maybe seven thousand, one hundred dollars. The buyer is probably thinking around six thousand, one hundred dollars.
The problem is that they get into this negotiating process when buyers and sellers are strangers. When they are friends, they tend to agree about the price of an asset. What I mean by that is that friends generally transact the price closer to the actual value of the asset. More than that, they don’t bargain. So, for example, if I had something to sell to a friend, and I gave a specific price, very rarely with a true friend would someone ask if they would take a lower price. It is not treated like a garage sale transaction where some cheap person walks up to your twenty-five dollar item and says, “Will you take ten dollars?” That’s when buyers and sellers are strangers, but when they are friends, they agree on a transaction price, usually based on the price that the object is listed at. There is very little back and forth. How do you become friends with the prospect?
The way that a car dealer can become friends with a prospect is to get the manager involved earlier with these earlier TOs. When do you do this? Well, it all depends on how many cars you want to sell. If you are a car dealer, and you are satisfied with selling the number of cars that you are selling at the grosses you are selling, keep doing what you are doing. If you would like to sell more and if you would like to sell them at higher grosses, then let’s talk about when you should get managers involved.
If it were my dealership, I would try to get my managers involved right from the meet and greet, early in the process. I would definitely get them involved no later than after the demo. I am really just talking about coming in to do a fly-by, meeting the prospect, shaking their hand, and saying, “Listen, I am right over there if you need anything or if Bob can’t answer your questions. Just come on over and say hello.” Here is an interesting thought. How about if in this earlier TO the manager walks up with a bottle of water and offers it to the prospect and says, “Hi, I am Steve Stauning the sales manager. Bob is going to take great care of you, but if you have any questions, my office is right over there. My door is always open, so pop on in to say hello.” By doing that, it will benefit you later in the process when you are down to doing the numbers if you have to walk over and save the deal because the prospect will already know you.
Ok, now you’ve bought into getting the managers engaged earlier in the process so that you can get more sales with higher grosses. Those are front end grosses, but is there anything we can do about the back end grosses? This works for F & I as well. I have seen dealers do this well, and I have even seen it in a larger dealer study where F & I managers who do the fly-bys were able to get ten to fifteen percent higher back end grosses simply by conducting these fly-bys before the prospect gets into your business office. Same thing can happen with the sales managers, they should just stop by, meet and greet, and introduce themselves to let the prospect know that they will be talking to them later to do the paperwork.
You can do many things with this. One, you can do an assumptive close. The F & I manager already assumes that everything is going to happen the right way once you are done with the numbers, right? Then, it also takes away much of the concern that the prospect or buyer has about going into the business office. If I do a fly-by and say, “Listen, I am the guy that you are going to be doing the paperwork with. We will get the title info and all of the other information we need taken care of.” I have now made it very low key to come into the business office, right? It is no longer this big grand thing. Now when they come in, they will be more open to looking at F & I products. It has been proven. You can get ten to fifteen percent higher grosses by simply doing these fly-bys.
Here is a recap on this Short and Sweet lesson: TO early and TO often. That’s it. You will sell more and you will do it at higher grosses. How is that for short and sweet?