The voice on the phone doesn’t even say “Hello,” they simply growl, “Are you under MSRP?”
During our speaking, coaching and consulting work in the motorcycle business, we are asked frequently how to respond to this particular question. We would never give guidance regarding how you set your margins or suggest you ban together with other dealers to control pricing, which is considered collusion, but here are some thoughts on this common issue:
First of all, you have to know your dealership’s position on this issue. This is driven primarily by your cash flow and debt situation.
If you’ve got high debt and low cash flow, my advice to you is going to be different from someone who has decent cash flow and reasonable debt. A high debt and low cash flow situation is about survival. When that’s the situation, my advice is to do what you have to do, legally, to keep the doors open. You can’t contribute to the motorcycle business, your community or your employees if you’re closed.
Take a look at the diagram to help you understand the actions and time perspective associated with this idea.
Now, most of the managers reading this are not in a dire situation because they’ve done things well over the years. So assuming the dealership is in a reasonable cash flow situation and reasonable debt situation, here are some things you can keep in mind when you think about your approach to this phone inquiry.
It is important to understand your market and your motorcycle inventory, which can be divided into three categories:
Fast Movers: Those bikes you could put out back under 4×8 sheets of plywood and customers would still find them and pay full pop.
High Profit Potential: Clean used units, cool accessorized new units or something that you are uniquely positioned to sell.
At Risk Bikes: Those bikes that are either costing you flooring or about to cost you flooring.
If you’re in a reasonable business position, I might suggest no price flexibility on fast movers, very little price flexibility on high profit potential units and more flexibility on at risk bikes.
Instead of reducing the price of the bike, add additional value to at risk units by offering low cost ESP or PPM, tires for life or batteries for life (of course, all with their own considerations).
Does this impact profitability? Yes.
Does it help protect the brand and your market? Yes.
Does it relinquish control to the buyer like a price off on the bike? No.
Plus, you can rotate these offers around so there is always something new and interesting.
Now, one more piece of the puzzle, and this is a big one. What is your philosophy about business? Mine is that all business is not good business.
The customer willing to spend the least will ask the most. And I can’t afford his business, mentally or financially. So, do you have the self-confidence and self-esteem to be able to walk away from the business?
Believe me when I say this: Even today in our consulting practice, we have some projects and former clients whose business we just don’t want, so we don’t take it.
How can you walk away from bad business? Make sure you have more business than you can handle. How do you do that? Effective prospecting. Most dealerships and salespeople do not do a great job at prospecting, and it creates a low flow into their prospect pipeline. That’s why when they get someone either on the phone or in person even remotely interested in a bike, they stumble over themselves and do whatever it takes to get the business, which typically is relying on a discounted price.
Now that we’re set on strategy, we can talk about how you should handle the call.
Salesperson: Sales, this is Mark, How may I help you?
Caller (usually with an attitude): Are you at MSRP or below?
First of all, the problem here is the salesperson relinquished control of the call in about 2.7 seconds. Rather than this hackneyed approach to answering the phone, how about:
Salesperson: Mark Rodgers, Sales, Who may I ask is calling?
Caller: Ian. Ian Fleming.
Now what you’ve done is taken charge of the conversation. More than likely you’ve gotten not only the customer’s first name, but also their last name as well. Why? Because that’s what you gave them, people are inclined to repeat in kind.
(Now I know, the caller may still growl through gritted teeth, “What’s your best price?” But most won’t; they’ll respond as you’ve directed. One tip: Poor prospects rarely transform into great customers.)
Now what you can do is something like this:
Salesperson: Ian Fleming, nice to speak with you. You’ve caught me right in the middle of something. I’m going to need to put you on hold for literally 5 seconds. I see you’re calling from 212.555.6565, if we get disconnected can I reach you there?
Then after 5 seconds (see you’re keeping your commitments already!) pick up the line.
Salesperson: Ian, thanks for waiting, what can we do for you?
Caller: I want to know what’s your best price on the new Street Glide?
Salesperson: Here at 007 Harley-Davidson, we have over 125 new and previously owned Harley-Davidsons in stock at all times, including the Street Glide. Our new motorcycles list at MSRP. This enables us to provide you with an unparalleled dealership experience. And at the same time, we always have interesting bikes, unique offers and cool things going on here at the store you can’t find anywhere else.
Here’s what I’d like to recommend. Why don’t you find some time, come down to the store and I’ll give you a personalized tour of the bikes, the store and then you can see for yourself why people choose to do business with us. Would you like to come in today or tomorrow?
Here’s a deconstruction of this approach:
The entire objective of this response is to pique their interest enough to visit the store so you can prove to them in person why doing business with you is good for them.
Reinforce the name of your store and your product availability of their motorcycle of interest.
Answer the question and position it from their perspective. Few bargain outlets have terrific events, superior employees or great customer service.
Let them know, subtly, that on some motorcycles there may be special offers like service offers or batteries for life. This is the “unique offer” reference.
Use the word “recommend.” You’re the expert here and people defer to experts.
Move the conversation to the next “yes,” which is setting a time to get together.
What if they say “no” when you ask if they would like to come in? Simply say, “Ok, well you certainly don’t have to decide right now. Think about it, and when you’re ready, give me a call and we’ll show you around. My name is Mark and my personal cell phone number is 414.345.6745.”
Why this response? It’s no pressure and it keeps the conversation alive: “Think about it, and when you’re ready …”
Here’s another script you’d better be ready with!
Caller: The guy down the road is cheaper.
Salesperson: Are you looking for a cheap price on a motorcycle or are you looking for a great dealership experience?
Caller: A great dealership experience.
Salesperson: That’s exactly why people do business with us! We’re a gold star and shield award-winning dealership; we’re open seven days a week, and all of our salespeople give their customers their personal cell phone so you always have a contact. Here’s what I’d like to suggest. Let’s schedule a time, come on in and we’ll give you a special behind-the-scenes tour of the store. Would you like to come in on Wednesday or Thursday?
Ok, so that worked out great, but what do you say if they say they want a cheap price?
Salesperson: I can guarantee that if all you’re looking for is a cheap price; you will be able to buy this motorcycle for less somewhere else. But, if you’re looking for a great dealership experience, there’s nowhere better than our dealership. We’re a gold star and shield award-winning dealership, we’re open 7 days a week and all of our salespeople give their customers their personal cell phone so you always have a contact. Do you have any other questions I can answer for you?
What happens if they say they are looking for great service and a cheap price?
Salesperson: I’ve been told you can have anything in life you want, but you can’t have everything in life you want. You will almost never find the cheapest price and the best dealership experience under one roof. Economically speaking, it’s virtually impossible. Do you have any other questions I can answer for you?
The transition question of “Do you have any other questions I can answer for you?” assumes you’ve covered this topic and moves the conversation to the next positive point.
We must say this again. We are not and would never give guidance regarding your pricing or suggest you ban together with other dealers on pricing. That would be illegal and we would never suggest or imply that you ever do anything illegal. The above conversations and scenarios are provided to give you ideas so that you may come up with your own approaches to pricing and to business.
An award-winning author, top-rated trainer and founder of Peak Dealership Performance, Mark Rodgers holds a master’s degree in adult education and the National Speakers Association Certified Speaking Professional designation — only 500 people in the world have this coveted recognition. Contact [email protected] to improve your performance.