02/05/2018
Why Consumers Are Still Saying NO To Vehicle Service Contracts
By Rob Christman
I spent the holiday season with my wife vacationing in Portugal. What a beautiful, old world country! So rich with history and culture. The Roman’s have influence in the country from when they occupied it for a thousand years. The Arab influence from when the Moors controlled the country. There’s Spanish influence and of course, the Portuguese people have developed their own culture on top of these for the past 900 years. Yet, in Lisbon, the buildings all date post 1755. Why?
In 1755, something happened that no one foresaw, no one planned for and no one even dreamed of. That something is still the most lethal earthquake in recorded history. Killing an estimated 100,000 people and destroying most buildings and structures in Lisbon. Complete devastation!
For several years now, I’ve been writing about the three reasons consumers buy from a dealership: Trust, Safety and Security! Yet half of sales are walking out of your dealership without buying the most important product you have for sale; a VSC! Why?
Whose fault is it that the consumer didn’t buy from you? Is it the consumer for not having an open mind? Is it the salesperson’s fault for not leaving enough meat on the bone? Or, is it because it was a cash deal and the consumer wouldn’t dip into their pocket for the additional cost? Or, is it the fault of the F&I Manager for not pre-qualifying, asking questions and throwing too much at the consumer and causing buyer fatigue?
It is the salesperson’s job is to sell the vehicle for as much gross as they can hold. Why leave profit on the table that you may or may not get on other products? Here lies an opportunity for Dealer Principles and General Managers to evaluate why these deals didn’t happen on a case by case basis, but the findings will show that the no sale falls into one of two categories: no money or no need.
No money or no need is how the consumer is seeing it. Truth is that unless the customer is on a short term lease and doesn’t put much mileage on a vehicle, there’s going to be a need. How can you best communicate that? First, most vehicles today are computers. When something breaks down, it’s no longer, adjusting or repairing an item; it’s changing an entire circuit technology. That can be an expensive proposition!
I was sitting in my office today and watching my IT Director trying to identify an error in the key machine. He literally went through three circuit boards before identifying the fault and getting the machine back in working order. Buying three circuit boards that aren’t returnable! THAT’S a lot of wasted time and money that a certified professional could have saved! It’s even more complicated on today’s vehicles! People want the high technology from today’s vehicles, they don’t want the high expenses that could be associated with the technology. And, they don’t want to think about devastation or suffering, yet the F&I professional must make them feel that there’s a threat of loss to their newly purchased vehicle.
Arm yourself with copies of past repair orders, so they can see for themselves the risks associated with NOT buying a VSC from you! Ask them questions to discern their understanding of factory warranties and where there are potential gaps in coverage that can lead to loss of financial security (high repair bills) and safety issues in their vehicles (not replacing those circuit boards!).
Many DMS systems are clunky and hard to navigate through while looking for tools that will make you money. Find a software that allows you to locate your data easily and efficiently. Finding relevant examples to use is critical to increase your VSC, GAP, Tire & Wheel, etc pe*******on percentages. Make sure that your DMS & CRM systems are up to the challenge.
Understanding the consumer’s true reason(s) to refuse the products are your responsibility. Showing them in a modern day F&I Menu that they’ve made a great decision and that buying a VSC is the next great decision to make is the most important job to protect the customer’s purchase, to drive service revenue, to maintain consumer loyalty and to get great social media reviews! ALL of which are critical to dealership success in 2018 and beyond!
Once again, your DMS system becomes a friend or foe; integrating your F&I Menu into your DMS and not having to start keying deals while the customer waits will change the customer experience and make a better buying environment; which equates to higher closing percentages.
Menu selling and using real life examples from your CRM system will make your job easier. When your customer buys the VSC, they can take the vehicle and make sure that it’s a lasting monument rather than an ancient ruin!
If you’re an Independent Dealer and want better insights into your dealership’s business, to gain extra hours back into your day and create additional revenue opportunities, call AutoMatrix today at 954-228-8595.
