Lost Sales

Is your dealership missing sales opportunities? BOC presents ten reasons why dealers lose customers.

It seems like we are missing a lot more sales than we should. There are customers who call or even come into the dealership who should be buying from us, but they don’t. What are some things we could do to capture more of these customers?

The answer this month is provided by Best Operators Club member Curtis Sloan. Curtis is Vice President of Sloan’s Motorcycle & ATV Supercenter in Murfreesboro, Tennessee.

Curtis, you brought up this subject at the last meeting of the Best Operators Club. What have you discovered about why dealers lose a customer’s business?

Actually, I approached Jose Juarez of Victory Solutions about this. We use Victory Solutions to follow-up with our contacts and our customers. I asked him if he could put together a list of the top 10 reasons why dealers lose customers.

Jose researched his lost sales reports and also looked at customers who had service department issues. This is what he found: The #1 reason dealers lost a unit sale was not having the desired new product in stock!

Nor did they make any attempt to locate this product. In addition, salespeople were not probing customers to find out if there were other options.

So they just basically said: "We don’t have it," and walked away? That’s pretty sad. This would be an opportunity for a little training to produce additional sales.

In some cases they simply ran the customer off by insisting that they purchase something else that the customer didn’t really want.

The #2 reason relates closely to #1: Customers couldn’t find the new product they were looking for, or the price was too high, so they ended up going to another store and buying a pre-owned unit. They never told the salesperson in the first dealership they might consider pre-owned, because the salesperson never asked.

Wow! It sounds like a lot of salespeople don’t follow the basic steps of the sales process — they don’t take the time to ask the customer the right questions to uncover their wants, needs and desires.

Curtis Sloan, VP of Sloan’s Motorcycle & ATV Supercenter.

This is absolutely true. We know for a fact that many dealers don’t have well-trained salespeople who follow a structured selling process. We love it — this is one of our greatest advantages over other dealers.

What was #3?

The #3 reason why dealers lost customers was service work not done properly. This also included things like the unit not returned when promised and a lack of communication with the customer as to the status of repairs. One of the major complaints was that they couldn’t get their questions answered when they called the service department.

This is interesting. We recently looked at a study on service issues. Almost two-thirds of the customers surveyed said they would not purchase from the same dealership after having two repairs for the same issue. Less than 10% said they would still purchase from the same dealer after four repair attempts. It is critical that the dealer gets it fixed the first time. From what Victory Solutions reports, it is also essential to provide accurate and timely information on the status of the repair. What was the #4 reason for losing customers?

The #4 reason was poor professionalism on the part of the salesperson. Salespeople were rude, showed a lack of interest in the customer’s wants and needs or were just plain dishonest — they were not truthful with the customer.

Customers like to purchase from people they trust, so being dishonest is a real quick way to lose a customer. In this age of easy access to information, many customers already know the answers to the questions they ask. They are purposely testing the salesperson’s honesty. At this point, three of the top four reasons why dealers lost sales and customers are related to poor performance on the part of the sales staff.

That’s right. Considering all the money we spend on advertising and promotion to get customers into our dealerships, we should expect better results from our salespeople.

It seems like a lot of additional sales opportunities could come from quality selling skills training. However, some of these salespeople might want to consider a different career.

As Gart Sutton says, they have to possess the correct aptitude and attitude to sell. If they have this, you can make them into salespeople with the proper training.

What is reason #5?

This one was not the fault of the sales staff: #5 was a lack of pre-owned inventory. If the customer couldn’t find what they wanted at a dealership, they went to a private party.

Pre-owned is a huge profit center for some dealers. However many dealers don’t pursue this market at all, so they have very little pre-owned inventory.

We make far better money on pre-owned than we do with new units. In addition, we rarely have comparison shopping because other dealers don’t have the same product in stock. We treat our pre-owned buyers the same as new customers. We ensure they have the opportunity to purchase parts, accessories, F&I products and service just like the new unit purchasers. This is a great profit center for our dealership

Indeed! Next month, Part II of The Top 10 Reasons Why Dealers Lose Customers.

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