Riding out the storm

The current economic news seems to be akin to the Titanic: the
unsinkable is sinking. The banking system, we were told, had been
sorted, but then secondary problems arose, which make it look as if
we will have to start all over again.

In terms of vehicle sales, we are seeing ever-worsening figures
in terms of new car sales; in the case of used cars, the market
appears to be holding up much better – but at lower prices.

Therein could lie a clue as to how the dealer might look at the
market; is there either a hidden green shoot coming through – or do
we have to seek out those market segments that might still be
alive?

Maybe we need to go back to basics and ask that ever so simple
question: what are our customers buying? Perhaps we need to refine
that question a little further – who might be buying in times of
tight credit, and is that what we are providing?

In this column in the past I have asked the question ‘what are
we selling?’ on several occasions. Increasingly I feel the true
product being bought is a financial services product as much as a
car. The client wants the opportunity for mobility and the least
painful way of paying for it – and the dealership needs to be able
to provide that package. Taking the argument one step further, the
would-be buyer needs more than one option, finance-package
wise.

In answer to the first question, customers are buying a vehicle
with finance. As far fewer prospects turn up at the dealership with
finance in place, point of sale would appear to be relatively
available.

Second point – who might be buying at present? The market
suggests not very many. Solution: analyse your prospects lists, but
first look at who has been buying over the last few months. Are
there any patterns coming through? I suspect there may be if you
look deeply enough. Identify those groups – what are they buying?
Take the profile to your prospects list and cross check. Given a
decent list you may well find you have a significant target
base.

Next step: develop a package to offer those groups. The issue
which may be most concerning may well be the lack of finance. Well,
if you have a good point of sale deal to offer prospects, tell them
about it. Research I undertook a few months ago for Black Horse
showed that it was almost the exception rather than the rule that
prospects were offered a finance quote.

In the current economic situation, maybe that is the point to
start. “We can offer you the finance to acquire a car” could be an
interesting slogan, even when you attach all of the terms and
conditions as required.

Take the discussion one step further. What hard metal product
are you going to offer?

Certainly the manufacturers’ captive finance houses are offering
attractive funds with new cars. Add the point of sale and that
widens the opportunity. But not everybody will be committed to
buying a new car. Equally, used car prices have slipped in the last
few months

Another opportunity?

‘Used cars with finance at amazing rates’ – the possible basis
for a marketing programme? ‘Cash flow’ is as important – and
perhaps as lacking – as lifeboats on the Titanic. So, from the
dealership viewpoint, might we have here the basis of a short-term
programme to keep the cash flows running? New and used vehicles;
used vehicles at especially attractive prices; funding to go with
them; the embarrassment to some potential buyers; a business
profile of those who have bought recently; and your prospect
list.

I suppose, to continue the Titanic metaphor, all we need now are
the oars to power the lifeboats forward…the sales team? All hands
to the pumps – does that mean draft in as many as possible to help
with telephone calling and prospect contact?

Maybe I have been flippant in a period of industry doom and
gloom – for which I apologise. However, the message is clear.
Establish exactly what the prospect wants – is it a vehicle or a
financial services package? – structure it at the best possible
price, and take it to market.
 Remember – a small margin is much better than no margin at
all. Good luck!