Is this anything?

Out riding one day a few years ago outside of Nashville, Tennessee, I ran into a guy who was bragging about the $500 he’d saved buying his Goldwing at a dealership in Kansas City, Missouri instead of the local dealership. As the story about his flight to KC and subsequent ride back home divulged more details, I began to realize that he’d more than used up any “savings” just by making the trek to get the bike. …so I pointed that out to him.

His answer really spun me. He said, with a perfectly straight face I might add, “The difference is that I saved money on the bike and spent money on a ride. The bike was an expense but the trip was an investment.”

I remember wondering, do all customers think like that? Do they justify things that way? I certainly didn’t. But somehow it made sense… and it wouldn’t leave me alone! It was money he would’ve spent riding to KC anyway, regardless of whether he bought a bike on the trip or not. Eventually I had one of those defining moments; one where I completely changed my approach to selling.

Think about it—the difference between a monetary expense and a financial investment is that an investment is all about yielding a return; that’s how you assess an investment. An investment involves tendering some form of capitol in exchange for something worth more to you than the amount you’re investing. Last month I referred to sales training as an investment, but does buying a motorcycle work the same?

Here’ what I finally realized. Motorcycling is an investment while a motorcycle is an expense related to the investment of motorcycling. People invest specific types of “capital” into riding with the expected return of some form of enjoyment. They invest their energy, their loyalty, their passion or their time into the sport hoping to derive some “return” on that investment. The great news for us is that we know that their return will be worth it. The only expense involved is the price of the bike; even riding gear and accessories are mostly about the benefit they’ll get from investing in them.

So how do we apply any of this to our sales process? most of the change came in our pre-paid maintenance program. I know that with the many maintenance programs I’ve helped dealers design, the ones that customers buy most consistently are the ones that add the most value [pronounced: return on investment] to the customer’s ownership experience. If the program increases convenience, the quality of care for the motorcycle, ease of use, etc. the product nearly sells itself. More good news: because customer redemption is typically around 50%, a real discount can be designed into the program truly reducing the amount the customer will ultimately pay to own the motorcycle. That becomes a tangible, easily provable benefit [pronounced: return].

Here’s just one of the things we did to change our sales approach. We were able to further separate the bike buying and/or negotiating process from the F&I process, thereby getting better numbers in F&I. The benefit that sorta snuck up on us was that we also found ourselves involved in protracted negotiations far less often; as we made increased value a genuine part of our competitive advantage, trust increased. Our team knew that we were providing better value and were really excited about letting customers know.

We accomplished this shift as we developed word tracks to help our salespeople keep the sales encounter on track. Salespeople could honestly say to a customer something to the effect of, “let’s pick out a bike first and we’ll show you how much better it is for you to buy it here…” or as one dealer actually incorporated as his advertising slogan, “you might be able to buy it cheaper somewhere else, but you can’t own it for less anywhere! Let us show you how.”

Back to investment vs. expense: basically anything that would provide a return to the customer was part of the F&I process, while the expense (the price of the bike itself… and pretty much nothing else) was now all addressed prior to the F&I process. We’ve also seen the creative side of negotiations get more deals closed by allowing us the opportunity for questions such as, “If I can save you $500 on owning the motorcycle, would you be willing to forego a $500 discount and buy it at our price?” Never forget that the ultimate competitive advantage is always value.

Hopefully this installment has at least made you consider a different approach. Although we made this adjustment to our process years ago, I’m willing to bet that your customers are far more sensitive to how they spend money in the current economic climate. I’m also betting that you can come up with some creative new ways to incorporate this stuff into your process and deliver more value. I dare ya!

I’d love to hear what you’re doing to make your sales process better. Remember, phone calls are free.