Don’t let doom-mongers get you down, think creatively
with non-prime customers, says Gillian Kendall.
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Open any newspaper and consumers are faced with a constant
stream of financial gloom and speculation that we may be heading
into a second credit crunch.
The economic turbulence of recent
years has certainly made people cautious in their spending and,
while I appreciate bad news sells papers, is it not this very
gloom, that make the public more fearful and fuels the cycle?
To quote Henry Ford: “Whether you
think you can, or whether you think you can’t, you’re right.”
Perception becomes the reality.
If the public believes times are
tough, then it’s a challenge to entice them into a dealership or to
obtain a commitment to purchase. It’s the same story across other
industries, with products fighting to be viewed as necessary,
rather than luxury, purchases.
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By GlobalDataThe challenge facing our market is
to alter the perception, and certainly the excellent offers
available on PCP and 0% go some way to demonstrating that, in many
instances, a new car could equal a lesser monthly overall cost than
an existing vehicle.
But does this go far enough? It’s
our role to maximise every possible sales opportunity, and that
includes examining the beliefs of our staff and asking a few
questions.
Do our sales people believe the
market is too tough to smash sales targets? Do we offer every
potential product, or do we select the cheapest add-on to present
to the customer? Would an income and expenditure conversation,
early on, be a real potential benefit in our understanding of the
customer’s needs?
While customers may be looking more
closely at their outgoings, the opportunities are still there. For
instance, a service plan or extended warranty has the potential
to
protect the customer against future bills.
There are currently many positives
in motor finance, excellent offers and products that, if promoted,
can change customers’ perceptions. The non-prime market is
undergoing significant growth, with a number of lenders showing a
healthy appetite to write business. As an area of growth for 2012,
dealers will be looking to convert higher numbers of non-prime
customers.
If footfall is down, it becomes
imperative to increase conversions and maximise every enquiry. At
AUF, every finance proposal is an opportunity to help a dealer
retail a unit.
The tightening of criteria by
mainstream lenders provides a chance for dealers to embrace the
growing non-prime market and to retain past customers who are no
longer ‘prime’. We look for new and innovative ways to support our
partners and to help dealers close difficult finance sales
quickly.
Dealers have less chance to speak
to mainstream lenders about underwriting, and having a specialist
broker who can offer understanding and support can make a
significant difference to conversions and units delivered. And
speed is also important, as a fast acceptance enables the dealer to
complete the sale.
So don’t believe everything you
read in the papers. By using creative ideas, training and support
to help manage customers’ perceptions, all the opportunities are
still available.
The author is national accounts
manager at Auto Union Finance
