In terms of unpleasantness, buying a new vehicle often ranks up there with visiting a passive-aggressive dentist, or perhaps meeting with your child’s teacher to discuss his or her “performance.”
Overzealous salespeople who stereotype customers, high-pressure them into buying the vehicle and package the seller wants, and generally lack knowledge about their own product likely sour more people on a brand than recalls and scandals. If only there was an easy way to avoid turning customers away while boosting sales.
It turns out, the solution could be very simple.
In the wintry wastes north of Lake Ontario, the general manager of one Toronto-area Hyundai dealership turned his operation around, only because he grew sick of the sales tactics used by dealers.
According to Autofocus, Greg Carrasco of Thornhill Hyundai found the best of both worlds. More cars moving off the lot, and more customers leaving the dealer happy, rather than heading to the competitor across the street. At its core, the plan kicked the commission sales model to the curb.
After taking over the dealership, the 25-year dealership industry veteran was eager to try something different. Well, “different” if you’re in the biz, less so in the outside world. In February, the he stripped staff to the core, then launched a non-commission sales model. Carrasco brought salespeople in from outside the industry, counting on customers to know what they want.
“I want their first interaction with the car industry to start with me, and I will go out of my way to invest in new employees,” Carrasco told Autofocus.
“[Our staff training is only] five percent about cars, and the other 95 percent is centered around people,” he added. “As customer service agents, we need to understand how people behave, what the customer is looking for, and how quickly their non-verbal cues can be understood in order to address their feelings or desires.”
Thanks to the Internet, more customers than ever walk into dealers knowing the model, packages and pricing they’re after. Carrasco figured, why not just give them what they want? In his view, the Glengarry Glen Ross-style salesmanship of yesteryear alienates customers.
Instead of earning commission, the salespeople at Thornhill Hyundai earn bonuses based on customer satisfaction. While assisting with a sale still nets them a bonus on top of their salary, the real cash comes when a customer gives the dealer a minimum 96 percent Customer Satisfaction Index (CSI) score. The result of this new approach? Sales in 2016 nearly doubled to 1,700 vehicles, while next year’s forecast is 2,500.
As word of its no-haggle, no-commission approach spread on social media, so did the dealer’s reputation. According to Carrasco, a full 55 percent of Thornhill Hyundai’s customers now purchase their car online, never entering the dealership until it’s time to sign off and pick up the vehicle. Many come in from outlying communities, passing other Hyundai dealers on the way.
The no-haggle, online-heavy approach could pay dividends for other dealers, especially with the growing crop of car-buying Millennials claiming they hate the dealership sales experience. Already, brands such as Genesis have eschewed the dealer-centric ways of the past to lure in buyers.
[Hyundai Motor America]
Nothing new here Scarff Subaru has used that model since their inception while his dad’s Ford store does the “clearly priced no haggle sticker” at his Ford store he doesn’t tout the no commissioned sales staff. Meanwhile grandpa’s Ford store sticks with the traditional model and is the only one of the family that will get my (parts) business because they are much cheaper.
People don’t buy cars from nice salespeople – they buy cars from the salesperson that can “push them” to sign the dotted line. Everyone gets cold feet and needs a push. If this product advisor / non commission sales model worked, everyone would be doing it.
They don’t.
BTW, Carrasco is a Twitter whore – runs 3/4 of his marketing budget through it, giving away free iPads, iPhones, sports tickets etc. Easy sell against a $13,995 Hyundai @ 0% over 84 months.
MoDo, you have a point, but I was the exception to your rule.
I sold at a decent sized VW dealer a decade ago. I was perpetually the top salesperson in my store, and in our region. One year, I managed to win a contest where the top one percent of VW salespeople won a trip to the west coast for a week at a pretty swanky joint–not the smallest achievement when you come from a total cow-town in the Midwest where you’re borderline commie pinko if you drive a VW. Made good money for myself and the store.
I was never the pushy closer type at all. I was the product knowledge, super VW fan who had owned a VW 412, had a project Quantum syncro, and drove a 20 year old Rabbit pickup to work frequently. Heck, I had a pretty large toy VW collection in my office that was a total conversation starter. At one point, I had a giant map of the metro area on my wall, and I put a colored pin on the map for each customer depending on what car they bought. Passats were red pins, New Beetles blue, Jettas were green, etc. Customers loved it. I was probably the antithesis of everything they teach you in car sales. I was the nice guy you speak of.
I’ve heard from a number of people in the auto dealership business that people like me make poor salespeople. They don’t want the car enthusiasts, or product technical knowledge experts on the brand. They want people to follow a sales process and get people to sign on the line that is dotted (Glengarry reference).
I don’t know. I’m the oddball. Customers liked me, I rarely if ever had to look up product knowledge questions because I knew our cars and the competition inside and out. I test drove competitor’s cars on my day off to see where they were weak and where we were weak. For years after I left, people I knew who still worked at the store told me that customers regularly came in to find I wasn’t there and were disappointed. I’m not saying this to toot my horn, but just to illustrate that it was all about the relationship, and little to do with “push” in my case.
But anyway, I never pushed anyone to sign anything, really. My mission was to make my enthusiasm for our product rub off on the potential client. Also, to see if we had a car that met the client’s needs and wants, and demo that car to them properly.
I go on test drives now that I’m out of the business, and have to laugh sometimes. Sales guys asking me all the scripted questions that are obviously part of the sales process. You ask them if a car has a multi link rear suspension, you get a glazed look. They are mostly drones selected by dealers to be moldable into following a sales process. I bet I outsold most of them by throwing all that crap out the window.
Ultimately, I probably left the business because dealers don’t understand salespeople like myself. It became no fun to sell anymore, because they were all about rigid process that some consultant sold them on. Leave me alone to learn the product inside and out, and I’ll sell more cars than anyone in the store because I personally believe in it, I drive it myself, and I can convey that to others and make a sale. Instead, the dealer is more concerned about whether I made a rote entry into a prospect management system, and whether I turned over a prospective client to a manager before they left, even though customers hate obvious crap like that.
You probably don’t even get an office to decorate with toy Volkswagen cars and vintage memorabilia any more. You are in a cube in a call center until you get a smidge of sales floor time. Screw that.
I hear you as I also use to sell new cars and never pushed anyone either. They all come in hating you, but once they find out you actually know what you’re talking about they would often feel comfortable enough to purchase.
Now I work in a much larger capacity and have seen this non commission model fail repeatedly when put into action – just as recent as last week at a huge store. But not after all but one of the sales people quit are they now trying to re-hire a totally new sales staff and put the old commission model back into place.
In ’05 I went into a Jeep dealership looking to buy a new Wrangler. I’d been a dealership technician, and I had a chip on my shoulder. I figured out pretty quick the salesman was ticked off at me, and I didn’t care, but he played it cool and made an easy sale. His easy-going, no pressure attitude made the sale. I was chatting with the financing guy (I wasn’t stressed any more because I’d already arranged financing through my credit union) and I mentioned the dealership I’d worked for and he started laughing. He and the salesman had been wondering why I had such a chip on my shoulder – the dealership I’d worked at had a nasty reputation among salesmen. Because of the positive experience I’ve recommended their dealership to friends, even though to this day I still hate dealerships.
Maybe broke losers with bad credit do. But successful intelligent educated people with money to spend hate those tactics and laugh at the goofball salesmen making $50K who think they are smarter than business owners, lawyers, and financial professionals.
We bought a CPO BMW X5 from a minimum haggle low key sophisticated dealership. Trade allowance was KBB. Price was low end of KBB. $37,000 for a 2013 sport version 3.0 with just 34,000 miles. Stickered for $65,000 3 years before. 1 year full warranty and 2 years CPO warranty after that remaining. No problems. This dealership sells more than any other in the country. Super clean, no issues in the first several months.
I would buy there again even if their price was $1500 more than a typical dealership just to not deal with the morons involved at those.
If you have to force someone to buy your product you need to find a better product to sell and a better clientle to sell to.
This sounds like a refreshing way for a car dealership to do business. Hopefully the business model proliferates.
That said, I had a very positive experience when I bought my Mazda 3 a few years ago. Granted, I checked out online the reputation of all the local dealerships and went to the one with the best rating. The guy I bought it from put zero pressure on me and was very accomodating (3 test drives!). I felt he was honest and we negotiated to what I felt was a fair price. Obviously not every salesman is cut from this mold (maybe he’s the exception to the rule) but my point is the traditional way of selling cars isn’t always painful.
Careful about believing those online reputation scores. It’s easily changed or manipulated with faux reviews paid for by the dealer. As an example, the closest BMW dealer to me has a 4.5/5 overall score with 75 or 80 reviews. Sorry, no car dealer is going to be ranked that high, especially one with an OK sales dept and sketchy service recommendations.
The dealer I went to currently has a 4.4 star rating on 112 Google reviews.
You’re right in that good reviews can be manipulated by bought reviews and online ratings can’t always be trusted. In this case, at least in my experience, the reviews/ratings were right. Maybe I lucked out got the right sales person too.
At any rate, they’re a good starting point is all I’m saying. If they’re wrong, than they’re wrong and you can always go somewhere else.
Yep. Dealerrater in particular gives me this vibe. Tons of positive reviews that are likely manipulated.
Dealerrater give the dealer a kit with cards and stuff to put on the staffs’ desks to solicit reviews. For most sales staffs, that is much easier to do than try to explain Google.
You can always spot shill reviews, because the morons who work at these places are too dumb to be subtle about it. They will ALWAYS include their own name repeatedly in the glowing reviews, along with “be sure to ask for Bob!” because they can’t stand the idea of a buyer seeing the review and getting assigned another salesman by chance. Real reviews will include the bad with the good, not be 100% glowing, and usually give suggestions for improvements.
I had the same positive experience buying a Mazda 3 from Galpin in the L.A. area some years ago. My salesman was zero-pressure, answered questions honestly, got me the car I wanted instead of pushing me into the ones he had, matched the competitor’s quote I’d brought in, and got the sale concluded promptly through his F&I guy (who was also patient, applied no pressure, and answered questions honestly). I thought hmm, that salesman must be an aberration, no way he’s going to last, especially at a high volume big city dealer. A year later, I got a postcard: he had been promoted to sales manager.
I don’t know if they’re still like that. But a guy I know reported a very similar experience buying a Ford and a Jaguar from them a couple of years ago.
I’ve told many people about my good experience buying from Galpin. And I’ve told many people about my miserable experiences buying from other dealers. It’s as if dealers don’t realize the power of word of mouth advertising from trusted friends and family.
You reminded me that the salesman I bought my 3 from was promoted as well (to used car inventory/sales manager). Budds Mazda is part of a family of car dealerships. Basically the Budds family owns pretty much one of each in a suburb of Toronto (plus a body shop) so they make money almost regardless of where you go. They even have a repair shop that specializes in Saab! I guess that contributes to the more relaxed and patient atmosphere there.
“While assisting with a sale still nets them a bonus on top of their salary. . .”
Words are funny things. Apparently, a “bonus” for making a sale is different than a “commission” for making a sale.
I’m also confused. This is happening in Canada, but the press release is from “Hyundai Motor America”? Unless “America” means “North America”, what does one have to do with the other?
*British* North America, thank you very much.
Remember Viscount Downton’s Canadian railway fiasco?
Who knows? Maybe “Hyundai Motor America” serves Mexico, too.
Perhaps, even, they’re using the term “America” to cover all of North and South America. I have no idea.
Because commission is a dirty word, and you can be sure that they don’t say a word about the salesperson getting a bonus from a sale and instead play up the fact that they get a bonus based on your satisfaction. As was mentioned in a previous article those that pay more are usually happier than those who pay less.
I don’t see that this is a press release from Hyundai, just that is where the picture came from.
It’s a subtle difference, but a “commission” implies there is a connection between the sale price and the amount the salesman earns. If the bonus is the same regardless of the final price, there is only an incentive to sell the car, not to pressure the customer for every last dollar. It’s those tactics that frequently make the difference between a happy buyer and one that walks away mad.
Also, for salespeople that work on commission, that commission tends to be the bulk of their take-home pay, putting further pressure on them to squeeze the customer for every dollar in their wallet. Giving them a higher base salary with a lower fixed bonus/sale removes that pressure from the salesperson as well. This creates a much more relaxed environment for everyone involved.
Is this not what Saturn did? My experience with Saturn was always positive. I bought 2 personally (back when a Saturn was a Saturn not a rebadged Chevy or Opel) and my parents bought 2 over the years. Never hassled, never pressured. Always left with a positive experience. This sounds like a good thing for dealerships to do.
My mother also purchased 2 Saturns thanks to their system.
Had a funny experience at CarMax this weekend… told the sales guy we wanted to test drive a Mini but he said why bother because they are not reliable. I was shocked at his honesty. Also told us we wouldn’t like the Benz C250 but let us test drive one anyway. He was spot on, the wife was not impressed with it at all. So some sales guys do know their stuff.
Saturn used to tie Lexus for top-of-the-list in terms of customer satisfaction.
Considering the difference between your average products from Saturn and Lexus, that should tell you something. Pity that GM seemed to learn exactly nothing from the Saturn experiment.
My first brand new car as a poor military lower level enlisted person was a 1995 Saturn SL, manual. Great experience. Very well trained sales staff who actually knew cars. No hassle. Willing to travel or special order a car if necessary with no resistance. I’ve purchased a lot of cars since, and a lot of fancier cars, but never had an experience as good as that base model Saturn SL.
Saturn had it all, except exciting, good looking, or high performing automobiles. The one company run right they gave the hand-me downs to sell.
Did you ever own one?
We had a family full of them at one point – about ten different Saturns. They were all good cars for ~150K miles save the Vue with the CVT. Honda engine was good of course but the CVT was never quite right. Wrecked at around 100K miles.
My experiences with the local Saturn were positive – even when I didn’t buy one, and especially when I did.
Me too. Really nice experience buying my SL2 years ago. Even the parts & service guys were honest and low-priced. Not that it mattered: those first Saturns were crude little bastards, but they were cheap to buy, fun to drive, didn’t rust or dent, and they never…ever…ever broke. Saw the service department for oil changes and occasional tires, that was it.
I bought an SL2 (’98) as well. The loud wind leaks around both front doors were completely unacceptable – and, apparently unfixable (after many return trips to the dealer). One year later, I traded it – didn’t have the heart to sell it privately – for a new SC2. That car had a glitchy throttle action that caused, at certain rpms, the car to surge strongly and repeatedly, like an off-and-on switch. That couldn’t be fixed, either (the old, “It’s within factory specs, there’s nothing we can do”). At 2 Saturn dealers, the salespeople were innocuous-enough, but the F&I men were as sleazy as the worst salespeople. The service department experiences were thoroughly unpleasant, whether for cash or warranty work. I later learned that all 3 area Saturn dealerships were owned by a large Ford dealer, which may, or may not, have had anything to do with the poor service. But the creaks and rattles which developed in both cars between 6k and 8k miles can’t be blamed on the dealers.
Best car buying experience I had was a few years back at a CarMax that sold new Toyotas. My daughter wanted to buy her first new car (a Toyota) and asked me to come with her. She picked out the car, was given the non-negotiable price, and shown financing options for ten different lenders.
The sale person was not a car person, but rather a very pleasant young woman about the same age as my daughter. While we were reviewing the financing the used car person prepared an offer on my daughter’s trade-in. Fixed offer, no dickering.
The price for the new car was fair, the trade-in was fair, and the financing offers ranged from absurd to “hey-that’s a good deal” in their rates and conditions. We were there less than one hour and came back the next day to pick up her car.
It was a good experience. There was no sales manager lurking in a back room, no finance manager trying to add on insurance TrueCoat or whatever. I wish that I could get the same experience at other dealerships. If CarMax (or some similar dealership) had more new car showrooms, I’d buy all of my cars in that business model.
I bought a 2012 Pathfinder from a Carmax that had a Nissan dealer (they don’t anymore). Price seemed fair, but my main reason for buying it from them was that they had a 6 left in stock, including one configured exactly how I wanted it, while pretty much every “normal” dealer either had none, or one left, in poop brown.
Another satisfied CarMax customer here. I’m used to their normal sales attitude. The one I’ll always remember is the exceptional one:
When I traded back in 2010, I was torn between a first gen Scion xB or a Honda Fit. The sales person (female) asked if I had any specific needs for the car. Yes, I’m caring for a terminally ill, invalid wife, who’s wheelchair bound, and I’ll need to be able to haul her chair with us every time we go somewhere.
She looks at me, says, “One minute, I’ll be right back”, and goes into the back room to dig up the wheelchair they keep there for emergencies. I spent as much time folding and hauling that chair in and out of possible cars (I was looking at a couple of others besides the Honda and Scion), as I did test driving them.
In the end, the Scion won – yes, the Fit had the Magic Folding Back Seat, but the back of the Scion held the folded chair quite well, and the Scion’s seat cushions were a bit higher off the ground, making it easier for me to get Patti in and out.
That’s customer service.
Mirrors our CarMax experience recently. One 45 min visit to test drive the vehicle, another one to wrap up the paperwork. I brought my own money. Price was good and several thousand less than the dealers’ advertised prices for my car’s brand for several hundred miles.
Didn’t want to travel 2-3 hours just to dicker. None would negotiate by email. I doubt I would be able to get the CarMax price (several thousand off the dealer’s advertised prices).
Our car was like new in every way.
The only way I see this business model not becoming the norm is b/c the dealers likely make more money off of hapless customers who think they have no choice but pay a price closer to the advertised prices b/c the customer doesn’t have the patience to negotiate that hard.
“Drop the Sleazy Salespeople”… “who stereotype customers”
Yeah, because we wouldn’t want to stereotype anyone.
Funny that one of the most unsaleable gnomes of a major OEM’s cars was chosen as the photo for a story about success.
I was just thinking why more dealers didn’t try this. Pay a basic salary and offer a bonus when a salesperson makes the sale. I think this makes a sales person less desperate to close a deal. You can do pretty desperate things when you need to put food on the table and all you have to rely on is straight commission.
I think the key is tying the salesperson’s paycheck to customer satisfaction. Ergo, the salesperson focuses on pleasing the customer rather than building a commission.
Re: 319583076
The problem is, many, if not most of the items on the surveys that determine the sales bonus are out of the control of the salespeople.
Questions on F&I, was the trim level you wanted readily available in stock, was the appearance of the showroom satisfactory, nebulous questions like “did you feel your time was valued”.
Dealers love this because it creates the illusion to the salespeople that all they have to do is have happy customers, and they will get a fat bonus check. The dealer can then structure the base pay lower, with the carrot held out there of the CSI bonus. The pay plan is sold to the salespeople with happy promises of bonus money flowing from the mythical fountain of youth.
The sales people eventually get dinged time and time again on little things they have zero control over. The dealership and manufacturer don’t care about minutiae like this, all they see is something less than “all fives” on the survey. It matters not that the survey was torpedoed by the pushy finance guy trying to sell an extended service contract. The salesperson ultimately pays the price for the “3” score the F&I guy got, or the “4” the customer gave on showroom cleanliness.
These surveys are usually pass/fail in reality. You get all perfect, or nothing. On a 1-5 scale, with 5 being best, and 15 questions on the survey (5 of which are in the direct control of the salesperson), two “4” scores out of 15 is the same as 10 “4” scores. It’s perfect, or nothing. Customers see a “4” as a good score. To the dealer or manufacturer, there is “5”, and every number less than 5 is the same, equally worthless, a fail.
A well structured incentive plan with customer sat scores as a component can be effective. From what I’ve seen in the auto industry, the implementation of such programs usually leaves a lot to be desired.
Notice next time you buy a car, or have your car serviced, how eager the staff is to pound into your head that you answer any survey you receive as all perfect scores. It’s silly, and this kind of thing de-legitimizes the whole survey process…which is ostensibly to find out how you’re actually doing, not just get a number on a card.
A portion of my annual bonus was based on Days Net Working Capital Improvement, which not only is totally outside of my personal control, but it totally outside our business unit’s control and even then – is arbitrarily bound to the corporate accounting department’s approved financial statements.
The reported value was outside similarly arbitrary targets constructed by someone(s) at corporate, so $0 ended up in my check.
Everyone deals with some arbitrariness – healthy organizations try to adjust it in the right direction.
My supervisor is advocating for elimination of this metric in next year’s computation.
In other words – which is more broken:
Salespeople padding a deal to maximize their commission, possibly at the customer’s expense?
or
Salespeople getting compensated, in part, based on customer satisfaction, which is recognizably measured in a sub-optimal way currently?
I still think the latter is the superior of the imperfect options.
<>
I agree with you in part, but in practice I think it’s possibly more extreme in the car sales world than it is in your case personally. Your business probably operates with more logic than most dealerships.
It ends up, in practice, that a HUGE portion of the salesperson’s income is based on the CSI scores. Also, it isn’t one or two little things that are flawed and out of the salesperson’s control that are annoyances. It’s 80% of the stuff on the survey.
Rather than being an imperfect system, it becomes a grossly flawed system. You the salesperson control, say, a third of the stuff on the survey that ends up determining a huge portion of your income. It’s not like 5 or 10 or 15 percent of your income is based on a survey that has a couple of pesky questions on it. It’s like a third of your income or more depends extremely heavily on things you have zero control over whatsoever.
Examples:
Customers that “never give a perfect score” because in their head, nobody is every perfect. So they give all “4” out of 5 thinking they are being really generous. To them, all “4” is really good. To the dealer, 4 = 1. You’d be surprised at how many people are like this, and subscribe to the “I never give all perfect scores” mentality. A surprising number.
Customer who showed up 30 minutes late for their finance appointment, because they felt like stopping at Target on the way in to pick up some trifle. They then are finished and out of the store half an hour later than they would have been, despite it being totally their fault. They are irritated, and answer the “was your time valued” question with a “3”. Survey destroyed. Salesperson loses 30% of their pay on that unit, or loses $100 at the end of the month. Customer thinks they did the salesperson a solid by giving all “5” on every other question.
Dealership has a Keurig in the lounge, but there is no organic green tea in the K-Cup carousel while the customer waits for finance. They answer “3” or “4” on the survey to the question about dealership facilities being comfortable, etc. Salesperson gets dinged. All the customer wanted to do was suggest that someone order some tea for the Keurig. Potential hundreds of dollars lost to the salesperson at the end of the month because they missed a CSI target by one percent due to lack of a green tea K-cup. You, the salesperson, stayed half an hour post close to deliver this car, and you bought their kid a little toy they liked from the parts counter out of your own pocket because the people were so nice. Still, you got one three on a survey and lost a hundred bucks even though the customers love you.
This stuff gets really old when you’re a professional salesperson busting your butt and putting in long hours trying to do a good job for your clients. You’re constantly getting dinged for stuff that has absolutely nothing under your control. This is different than occasionally getting dinged for something is brought up in a meeting and your supervisor is willing to change next year.
Eventually, you get worn down by constant and significant dings to your paycheck that you can’t avoid no matter what you do. At this point, you realize that no matter how diligent you are, and how customer focused, it’s a total crap shoot when the pay stub comes. This makes it really difficult to focus on continuing to provide a stellar experience…because you control so little of the survey outcome no matter what you do. The tie-in on your personal performance is just too weak, and the penalty for the missteps of others is too great.
The dealer management loves the type of system where the promise of $$$ is there to lure in salespeople, but the system is rigged to evade actually paying the money out. Of course, it’s your fault when the paycheck is small, not the game that’s structurally tilted against you.
The car dealership culture is a unique place.
The pushy F&I guy trying to sell me a third party warranty and a “paintless dent repair”policy torpedoed that section of the survey on my last car purchase.
There was a greater chance of a meteor hitting his office during his pitch than me buying that over priced crap!
I gave him a 2/5 on the CS survey.
Most dealers (and indeed manufacturers) do tie the commission and dealership bonuses to the customer satisfaction surveys. It’s a terrible way to do business, because they assume that anything less that a perfect score is a total failure. Consequently salespeople and their managers end up gaming the system to make sure that they scores are high, rather than making sure that the customer is satisfied.
Google “perverse incentive”.
I know several well educated, articulate, genuinely good people who left the car business because their stores went to this kind of CSI based pay plan. The all perfect or nothing system. Like you said, it then becomes an exercise in gaming the system rather than actually taking care of the client.
It might work in the case of a year end bonus, something that was nice to get, and sweet to get, but not something that affected your ability to pay your light bill.
That’s not how the stores set it up, though. Most dealerships are managed by old school car dogs who have been in the business for years. You can bet that the finger will be put on the scale in their favor. The pay system is set up to where it looks great, but in practice it’s almost impossible to meet the standards you consistently need to meet to get paid. When you raise this issue, that the survey and pay system are structurally flawed, that goes over like a fart in church. Management doesn’t want critical thinkers who figure this out. They want young, dumb, and full of you know what who are motivated by the pie in the sky promise of big CSI money that sadly will never materialize for 95% of the sales force no matter what they do.
It creates a negative climate in the store, and you lose a lot of quality employees who get tired of the monthly CSI dog and pony show.
A 90% on the survey does not count as a 90% to the dealership or sales manager. It counts as a FAIL. 100% satisfied or nothing. It’s an impossible to meet standard, and even if you have five 100% surveys, all it takes is one person giving you a “3” on whether there was soft enough toilet paper in the restroom to count as a fail and destroy your begged-for five perfect surveys.
Guys – my point is that we’ve been told America is the land of meritocracy and that hard work is what counts, but those are lies regardless of where you work.
The best way to get rich in this country is to have a rich Dad. The best way to become a bitter old man is to work hard and wait for someone, anyone to recognize you.
For most of us, work is a run-out-the-clock until retirement situation and you tilt things in your favor as much as you can with the tiny levers within your reach.
This. I have had numerous dealers pleading for all “5’s.”. Anything less and they basically tell me to not even bother submitting it. So if everybody simply scribbles in a 5, what true value does the survey have? And if an honest “4” tanks the pay for the dealer, same question. I had that argument when I used to do employee reviews each year…folks wanted perfection and I believed (and still do) that nobody on this Earth is perfect. And I was surprised I had grievances filed against me???
Say, where did Ruggles go?
He’s in a room somewhere yelling “COFFEE IS FOR CLOSERS!” at a gaggle of morose salesmen. He’ll be around when he’s finished.
That piece of “PR blip” has been doing the rounds in Canada since last week as if someone just invented the wheel.
Most commissions these days are not enough to afford anyone a reasonable wage while toiling in a showroom. Obvious there is a base pay and a “commission/bonus” on top of the base pay. That a dealer pays on CSI, the number of units sold in a month, capturing new customers, and so on is simply part of the pay package.
Does a customer really care how a salesperson is remunerated?
Towards month end if a dealer is short units to make their target, be assured there is motivation/pressure on everyone to close deals to hit target. Are well informed customers so naive not to know that?
How creative will a sales person get to achieve a high CSI score.
Its a good PR blip at year end for a dealer that is owned by a dealer group, which also owns a fully imaged Hyundai dealer about 10 miles up the road. http://www.phaetonauto.com/dealerships
Almost the same story from a few months ago https://www.thestar.com/autos/2016/05/27/cool-car-job-six-questions-with-greg-carrasco.html
That’s how we bought Wifey’s 2002 CR-V EX. We did an online sale, which netted us $500 of sticker. I know that’s not much, but at the dealer, they wouldn’t budge over $250!
In any event, we bought our “$22,200 picnic table” and it’s been a pretty good car ever since.
I’ve only bought 4 new cars from dealers since 1985. Maybe it’s because I’m a cash buyer or that I know what I want and how much I want to pay. I’m not a hard ass, but the few times I’ve run into hard sell what-will-it-take-to-get-you-to-buy-today dealers, I just walk out. Never had a problem finding friendly low pressure salesman. Maybe I’m just lucky.
I’m gonna go out on a limb here. As some of you know, I’ve been selling cars since June 2013. I’ve met a lot of “veteran” salespeople. I’ve learned a lot about car sales, and I’ve been able to support my stay-at-home wife and kids on a car sales income with three different pay plans.
I’ll say this- I’m probably in the minority, but I think the no-commission, no-haggle plan is a good one.
Here’s my dream pay plan- $500/week salary, unit bonus starting at 10 cars ($300 @ 10, $400 @ 11, $500 @ 12, etc), cash bonus for old-aged inventory. I honestly wouldn’t mind that income. That would take the pressure off of customers to buy and make for a more pleasant experience.
I sold for 6 years with a good deal of success. Still, I’d be willing to give your no commission idea a shot.
I bought a Saturn in the mid 90’s, when they were at their peak and the S series were selling well. It was a totally pleasant experience. No pressure, AND the salespeople totally knew their stuff. Saturn put a lot of resources into training their salespeople. Every Saturn person I dealt with at that time was friendly, low pressure, and was super knowledgeable about their cars. In the years since, I’ve seldom run into a sales staff at a dealership for any make that was as professional and educated as the Saturn people.
Saturn failed because GM didn’t keep investing in updated product, not because the sales model was flawed, I don’t think.
I worked at Saturn in the late 90s. They hit us hard with knowing product. They made me watch a training video of some sort of weird
“walkaround competition” wherein various salesfolks ran the same pitch over and over. I thought they screwed up the tape but later realized that they were just beating us over the head with the same lines so we would memorize them.
When we went to Spring Hill for a week of product and sales training, most of it was on product. Had to know that the SL2s and up had color-keyed door handles, while the lesser models did not, which one had the twin cam, which had front vs front and rear stabilizer bars, had to understand the detailed info on how the traction control worked. They also had us on a parking lot course with soapy roads so we could try the differences and a cone avoidance maneuver that had us try the SL1 vs the SL2 in action. They tried to get us with the L-series stuff, but I was there just as it was coming out. They still beat us at the store with knowing the engine choices (though sadly, that V6 out of the Craptera) transmission (L series had a manual for the crummy 4 cyl only tho), radio, seat coverings, etc.
I can still tell an SL1 from an SL2 from across an intersection and recall that there wasn’t an SW1 in the 1st generation of cars. LW2s had dual exhaust tips so you could spot the V6.
The local Honda dealer here does a per unit bonus and has flat rate pricing, not sure how exactly the plan works. I know they have done the flat rate pricing for 20 years, but have switched back in forth between full out salary and salary with bonus/commission.
It seems like lots of people today get a bonus based on survey results. That’s probably why every time I buy something there’s an associated survey, and the incessant begging to provide a 5/5 rating.
It seems that it’s only based on **returned** surveys though: those who who aren’t predicted to rate 5/5 aren’t asked to complete one.
Hence, meaningless. But we got our bonus!
Yes! We don’t force people to use travel agents to book airplane flights or insurance agents to buy car insurance. Get rid of the car salesmen and let buyers make a deal directly with an actual long-term employee.
My parents’ 2008 Element was a pleasure to buy through the only cool car salesman I’ve known — a friend who leads a metal band his spare time.
Didn’t work out for him at the Honda dealership. Guy stuck out in a crowd of car salesmen who’ve been around for decades. Works hustling Kias now and that dealership has adopted much the same approach.
Just my experience on the flip side.
I bought a new Ford from a dealership that used this model, no commission salespeople and no haggling price. They were closing out some models and seemed to have the best price on what I was looking for.
I couldn’t get anyone to buy the car from, people simply didn’t want to close the deal because it was just extra work for them to do all the paperwork.
It was the strangest thing, just people saying they were leaving, or had to go on break when you said you wanted to buy a car.
Finally found someone, but there has to be some sort of middle of the two extremes. The problem is, the sort of people that get into car sales have to have some sort of incentive model and I don’t think customer surveys will cut it.
FWIW, the dealership went back to being a traditional commissioned dealership, it was a brief experiment.
“and generally lack knowledge about their own product”
I visited a Toyota dealership last weekend and looked at some 4Runners. A salesman tried to help me, but when he couldn’t answer a very basic question about the vehicle, I just kept walking.
Q: Does the 4Runner have a power rear window? (I knew the answer)
A: I’d have to go check
Way to not have basic information about a car you’re trying to sell.
As a former sales person, this drives me bonkers when I shop for cars these days.
I always considered it to be my goal that a customer would never stump me on a product knowledge question. I took a lot of time to know the stuff inside and out, and the competition’s cars, too.
These days, I shop and am blown away that 90% of the time, I know more about car “x” than the person helping me out on the lot. Amazing. Dealers are far more concerned about getting their sales people to follow a script and a process designed to push the sales process along than they are training their staff on the product.
In the dealer’s defense, the average person probably doesn’t care about direct injection or double wishbone suspension or how stability control actually works. They like the pretty blue one, or the car that has the cool wheels if they can get the payment below $250 a month. The average car dealership doesn’t deal well with TTAC reader style shoppers. We represent 5% of the population, probably.
Was trying to help a family member with a new car purchase this weekend. He had already been in and talked to the sales person about what would be best and to find out the kind of payment he would have given them rolling his current upside down loan into the new purchase.
So I came back with him to do a test drive and put the deal together. Everything was set to go except I said I had not yet worked out with him what WE would be paying for the car as a starting point before anything else. Sales guy said no problem, you can work that out with the Business Manager. I thought that was a little strange, but okay.
So I told the business manager the same thing. She said I’ll show you the breakdown but I have to get these questions answered first. So after saying no to everything, I finally get to see an itemized list… There is was, the $538 “drive green package”. “What’s this?”, I asked. She didn’t know. Okay we’ll just take that off… wait don’t print a new list yet. We didn’t talk about the negotiated price yet. She looked shocked:
“The salesperson is supposed to do that.”
“Well, he didn’t”
So she finally found the sales person and he starts in on his whole speech about small margins, etc. Says that the $600 cash back is from the dealer, not factory.
Sales guy wouldn’t go back to check on what price we could get. I had to drive family member to work, so we walked out with no purchase being made, planning to come back Wednesday.
Why do sales people have to be d**ks about everything? They seem to take at as some sort of ego boost how badly then can fleece a naive customer.
Of course as soon as I got home I emailed another dealership, told them here is a chance to steal a sale, told them what we want and asked them for a best price.
I definitely noticed a difference since the wife and I switched to ‘premium’ brands this year. The dealership experiences at MB and Porsche were way better than previous ones with Jeep, Ford, Dodge, and Chevy.
Salesmonkey games are for the poor credit crowd.
It could be said that you’re displaying both transference and projection but I’m no Freudian.
Old man pants-
Or I’m 100% correct. For the most part people that are taken at auto dealers tend to lack the knowledge to walk away from a bad deal. And those the lack knowledge tend to have poor credit. I can make these statements being I was one of those salesmonkeys many years ago before college. Poor credit folk usually didn’t even know how bad they were ripped off because they were just happy to walk out of the dealer with a new or used auto.
Or you could be that salesmonkey that makes a living ripping people off.
“Salesmonkey games are for the poor credit crowd.”
I honestly think that is the truth of it. If you have money and good credit then they’ll probably assume that you’re smart enough to have done some research and know how not to get fleeced. But the flip side of that is that you’re also more likely to buy another car from them, come back for service, and generally be sensible about the situation.
If you’re dealing with low income/poor credit people then their purchase options are probably driven a lot more heavily by what they can manage to get approved for, and they tend to be less well educated about their options. If you tell them “your credit score is really low, but I pulled some strings and we can get you that Hyundai Accent for 72 months at $500/month” then they might just think that you’re doing them a favor. Try that trick on a person at the other end of the credit/income scale and you’ll get laughed at.
I want to buy my car from the manufacturer, not a dealership that is only 98% evil…
Folks on enthusiast websites blather on and on about how horrible the dealership experience is, but it seems to me that ordinary folks just put up with it. “I need a car. I’ll go shopping. I know it’s a horrible experience, but I only do it every few years, let’s get it over with.”
Yes. Like root canals and cardio stress tests, you just get the damn thing over with.
I’ll be damned.
I started at 18 as a salesman at a Lincoln-Mercury store where this was practiced. All cars were marked with clear, non-negotiable price. Used included, factory rebates on new included.
We were paid a salary, not commissions. Unlike Saturn, our trade in offer was firm, too. Some people hated it. Most loved it. Peope who opened up to the idea sent their friends and family there.
I remember this one customer I had, frugal old guy who had money to write a check for anything on the lot he wanted. He did NOT like the non-negotiable pricing. He came around to it, but when we assessed his 3 year old brown Grand Prix SE sedan, he said oh no, the Buick dealer offered him way more.
My manager said “do you have their number?” he did. She said, call them and ask is their trade offer good if you buy their new car or not. He did. No, no it was not. Without buying the car, they “couldn’t afford” to pay that much since they weren’t getting a new car sold. Our offer was.
I told him, even if you don’t buy our car, our offer is firm, because its a fair market offer not dependent on you buying our car. Its based in several factors and an appraisal, we show you all the data and sources. That’s how you know it is an honest deal. They’re padding your trade value by adding it back to the purchase price of the new unit. Its an inflated, misleading number designed to get you to feel like they’re throwing you a bone. It’ll be hidden somewhere amongst the price, fees, taxes, they know how to do it. Its pretty much standard practice.
I could tell it didn’t matter. Due to our low-pressure sales policy, I didn’t hesitate when he said he’d “think about it” and left. He didn’t believe a word we said, he felt like if he got more for his trade than it was worth, he was “getting up” on somebody.
That’s probably a feeling he enjoyed as much or more than actually buying a new car. He didnt come back.
A lot of people loved us, but the entire industry fell on hard times in our area in particular due to widespread lay-offs by major employers in the city in which we were located.
The dealership was sold to a Ford dealer in another city. They hired crooked, old school, big cigar smoking a$$holes who enjoyed “getting over on someone” daily. They would brag about paying virtually nothing for some guy’s pride and joy trade-in, making him think they paid over book for it becauase it was so impeccable and well maintained. Then, tell the wholesaler (or and inquiring employee such as myself) how they were in it SO deep, and its so hard for them to accept something halfway reasonable. Eventually the regular wholesalers quit coming around because it was futile.
They took on Mitsubishi franchise, and tried a second location, but they ran it into the ground.
I had fled the sales floor for the service department rather than sell their way. The service department was full of pre-takeover people, good hearted and fun. Well, within a year, they fired and replaced each one of us. Everyone was lied to. I was told I would replace the drunk used car manager. Nope, one of the old hacking geezers out front replaced him, and filled our lot with scrarch-and-dent Lexus ES’s and Infiniti QX4s that failed mechanical inspections at other dealers.
It was dead within a few years. A certified used Honda store occupied the building last time I was there.
The core problem with the auto retail business is it didn’t just have the job of selling cars- it also had to determine customer willingness to pay on an individual level.
In the old days, dealers had only one way to see how much a customer would pay for a car- by old fashioned salesmanship. While GM might price Car X at $25,000 MSRP, location ,local culture and other variables can alter the actual willingness of people to pay for Car X. People in State Y might want it bad enough to pay $35,000, whereas folks in State Z think it’s dog crap and won’t pay more then $15,000.
Ultimately , finding the highest price a customer would pay for the car at That Instant is what the traditional dealership system is designed to do- and pre Internet it did it well. Nowadays the customer has decided before even walking out their door what they will or won’t pay for a vehicle, which means all the 4 square sheets and finance office sales pitches won’t do jack.
When I shopped for my used F body, I literally found the car I’d buy on one last pass through Autotrader as I stood in baggage claim of the airport I flew into to buy a different used F body. The original dealer lost a sale before he ever knew he had it – someone else had a better price on a car with more features.
I showed up, told the F&I guy to take a hike, faxed over my prearranged financing and drove off. Bottom line the dealer became a paperwork and sale processing outlet ,not a revenue maximization tool.
That said -In the subprime space especially- the old sales model will never die completely. Subprime customers carry higher risk ,thus the need to increase revenue wherever possible to offset it -which preserves the old fashioned 4 square system.
Only once in my career did I have a chance to work for a dealership like that. I was in Parts/Service, and we had a really good team. Our customer base consisted of grandparents, fathers and mothers, and their kids. Their vehicles were serviced so well and honestly that they wouldn’t think about going anywhere else, and when it was time for a new car, it had to be another by the same manufacturer. The sales people didn’t really have to do much, and there was no need for them to put any pressure on anyone. Just about everybody who worked there was driving a car made by the company we represented. Those were happy times. The dealership got sold, and everything changed.
Another thing to note about those CSIs. The rate the service department gets paid for warranty work usually depends on it. I’d suspect that should be “always” instead of “usually”, but I don’t know about all manufacturers.
Twice in my lifetime a dealer suggested to me that I take the car home and keep it overnight. I accepted both times and ended up buying the vehicle the next day. How common is this approach?
I used to be in “the biz” but now I work on the corporate side.
Towards the end, I would only work for dealerships that were salary only. I hated working for commission, because not only did you have to worry about how much you were going to make for every sale, you also had to worry about how much the dealership was going to screw you over on as well.
I like knowing how much I’m going to make every two weeks, which is why I don’t sell anything for anyone anymore. The exception to that rule is selling 1/18th scale diecast models on eBay.
You’re lucky to have found a dealership that works on salary. I don’t know any that do.
Yet more opinions about how dealers can clean themselves up and make themselves relevant. The reality is, dealers are parasites staffed by lowly paid salespeople. Skip the dealer and just buy a Tesla.