10 Things I Learned from Car Salesmen

Recently, I bought a new BMW M3, both to commute around San Francisco and to race (guess which one I like better??).  And while my business success allowed me to buy the car of my dreams this time around and made the process of car shopping a lot more enjoyable, I’ve had plenty of different experiences – both good and bad – with car salesman throughout my life.

It’s certainly not a job that I’d ever want to try my hand at, but I believe that there’s a lot you can learn from the men and women in this profession.  The following are just a few of the lessons I’ve picked up from my past experiences shopping for cars:

Lesson #1 – Appearances matter

While car shopping during my most recent trip and over previous sales, I’ve always been amazed by the variability you see between shops.  Some car lots go above and beyond to transform their showrooms into galleries that showcase the best features of their various makes and models.  Others have looked so dirty and disorganized that I was afraid to even test drive their cars – let alone hand over my hard-earned money.

The truth is that appearances matter, whether it’s the clothes that you wear as you walk down the street or the way your website looks to new visitors.  It isn’t shallow to care about appearances – it’s a vital part of conveying to the people in your life just how much you care about your business and yourself.

Lesson #2 – Listen first

A good car salesman knows to listen to what the customer is saying before making any recommendation.  After all, initial appearances might not reveal that a young couple is looking for a larger vehicle before starting a family, or that a seemingly young adult might be looking for a top-of-the-line luxury vehicle.

The same goes for business people in any industry.  Stop thinking that you have the magic answer to any question, or that your product’s features alone will get you a sale.  Instead, start listening to what your customers are actually asking for and then determine how your products or services can meet their standard needs.

Lesson #3 – Know your products

If you think about it, keeping up with the number of cars that enter and exit a salesperson’s lot every day is a pretty tall order.  Not only are cars being sold all the time, but these salesmen must also stay caught up with both new line models and all the cars being brought in off trade-ins.

But for these same salesmen – and really, anyone else who sells something in his line of work – knowing the intimate details of an ever-changing product line isn’t just a good idea.  It’s a “must do” for salespeople who want to increase their odds of matching the right customer to the right vehicle.

Lesson #3 – Let the customer fall in love

Now, assuming that you – as a salesperson – have done a good job listening to your customer’s needs and matching him up with available products, you should be able to make a product recommendation that represents such an obvious solution that the sale is practically guaranteed.  Indeed, for many salespeople, one of the biggest challenges in making a sale is simply getting out of the way and letting it happen!

Good car salespeople know that they don’t often need to do much actual convincing.  Instead, what they need to do is match customers with their ideal cars and then let the products they’re selling speak for themselves.

Lesson #4 – Think about your buying environment

If you walk into a BMW dealership, you aren’t going to be greeted by a greasy salesman with a thick moustache and an open collar.  Instead, you’ll likely encounter a well-groomed sales team member who escorts you into expertly designed rooms and offers you an assortment of snacks and beverages.

This isn’t by accident.  The dealership understands how important it is to put customers in a buying state of mind before they even begin negotiating on numbers.  You can do the same thing in your office, in your store or on your website – really, wherever you sell products or push ideas.  Put some effort into creating the right frame of mind within your prospects, and you’ll be much more likely to make the sale.

Lesson #5 – Think long term

One of the car salesmen I encountered in the past said something that really stuck with me.  He said, “I’m not trying to sell you a car – I’m trying to sell your children cars.”

While he obviously did want to make a deal with me, his point was clear.  Sure, he’d love to get me into a new car, but he was ultimately more concerned with making sure the car and the deal that came along with it met my needs so successfully that I’d ultimately return and refer others to him in the future.

If you ask me, that’s a pretty powerful way to think about business.

Lesson #7 – Make things manageable

By now, most people are familiar with the car sales industry’s “four squares” trick.  Basically, instead of negotiating on price alone, car sales people present you with four different cost variables, including your trade-in value, your monthly payments, your down payment and the car’s sticker price.  Then, they begin negotiations based on the car’s estimated monthly payment, as this number is smaller and much more manageable for buyers than it feels to address the total price right off the bat.

Of course, if you’re the one buying a car, negotiating around your ideal monthly payment is the worst way to go, as these calculations almost always benefit the dealer over your own financial interests.  However, from the perspective of a salesperson, it’s an important lesson to learn.  Instead of forcing your prospective customer to stare down the full cost of a car’s sticker price, looking at monthly payment figures seems much more manageable – making it more likely that a sale will occur.

You can do the same thing with your products or services by breaking down higher costs into payment plans or smaller intervals (for example, “For just $5 a day…”) in order to help customers see your prices as being more affordable and doable.

Lesson #8 – Know your break-even point

When it comes to price negotiations, car salesmen always have an advantage over buyers – they know exactly how much money they have into a given car.  Although you may be able to estimate their investment into a vehicle based on online invoices and trade in estimates, there are a number of incentives available to dealers that only industry insiders have access to.

The advantage here is that the car salesperson knows exactly how low he can go in negotiations without losing money.  But surprisingly, plenty of people selling products and services these days don’t know their own break-even point – resulting in businesses that are losing money, despite high demand and high conversion rates.

If you’re selling something, you’ve got to know exactly what it costs you to market and close a sale.  Be sure to account for both fixed and variable costs (including any overhead and staffing expenses as well) in order to determine exactly how to price your products to ensure you actually make money.

Lesson #9 – Always follow up

Over the course of my last car buying decision, I wound up talking to quite a few different dealers before making a final purchase – which, of course, resulted in a stack of business cards from the various salespeople I met with.

What surprised me, though, was how different each dealership’s follow up approach was.  Some called so often that it got annoying, while others never even bothered to call back.  Only a few hit the sweet spot of following up at appropriate intervals that gave me enough time to evaluate my options and come up with follow up questions based on the cars I saw.

And while nobody likes being bothered by overly-enthusiastic salespeople, it was clear that those who never followed up didn’t really want my business.  Instead, it was the salesmen who called to check in occasionally that demonstrated that they cared about me and my needs, which went a long way towards helping me to finalize my eventual purchase decision.

The lesson here is that, if you want people to trust you, show them you care by following up at appropriate intervals!

Lesson #10 – Develop a thick skin

Honestly, I’m not sure if there’s anyone else in the world with a thicker skin than a car salesman.  Think about how often he’s told “No” in a given day – from customers who will wind up making purchases elsewhere and from managers who won’t give the go-ahead on the final numbers that are needed to make a deal.

I think there’s a huge lesson to be found there.  No matter what industry you’re in, you’re going to hear the word “No” from time to time.  Whether or not you’re able to brush off your disappointment and continue to push forward towards your goals is going to play a huge role in your success, so stop getting upset when you’re told you can’t do something and start learning how to move forward using a different set of tactics.

Overall, while it may not be the world’s most glamorous job, there are a number of skills that every marketer can learn from car salesmen.  The lessons represent a few of the techniques I’ve picked up from these employees, but if you have any others to share based on your own personal experiences, I’d love to hear your thoughts in the comments section below: