I was scanning the TV channels recently and came across an episode of Penn and Teller’s Showtime hidden camera show. The setting is an upscale restaurant branded as the world’s first boutique provider of bottled water. A “water steward” presents each table with a menu highlighting the finer qualities of each bottle of water, some purportedly shipped in from mountains and streams all over the world and costing as much as $8 a bottle.
Of course, the joke is on the customers because all the water actually came from the garden hose out back! But the message was clear. People are willing to pay more for a product if they think it gives them a truly special or significant value – and if you present it to them in just the right way.
The same can be said for F&I products and it raises the issue of selling the value – not the price of a product. Selling on value, not price, involves a balance of confidence, personal rapport, and doing your homework, and it’s become more difficult as technology gives consumers greater access to price information and competitors.
In general, one-third of your customers will be solely focused on price – and price alone. They need a basic set of wheels and they’re looking for the cheapest deal possible. Unfortunately, it’s this short-sighted perspective that often ends up costing this customer more in the long run and can jeopardize their ability to fulfill their loan obligation. These customers need to understand that basic VSC products add only a few dollars to their payments – but can protect against a major expense if the car breaks down. For these customers, cheap does not have to mean foolish.
Another third of your customers are familiar with the nature of value-based pricing and will be receptive to hearing why they should pay for a certain product. They are certainly price-conscious but may be more sophisticated. These customers want to protect their investment and know that a little “insurance” will serve them well. They don’t want to be caught unprotected in the event of a breakdown. For these customers, good value means they’re safe and secure.
The last third of your customers attach personal attributes to their vehicle. They are likely more concerned about the statement they are making with the vehicle – and less about the functionality of the car. For this customer, value reflects in the aesthetics and positioning the right F&I products can insure their purchase continues to support their attributes.
While you can easily identify the value of specific F&I products, your dealership has inherent value. Sometimes, the toughest job in selling value to customers is getting them to picture the full depth and breadth of everything your dealership has to offer. Each sales encounter offers an opportunity to build a relationship beyond the initial sale. And selling this value requires building a rapport with your customer.
Focus on the customer’s personal aspects and get to know their needs and background. Sometimes, the customer obsessed with finding the lowest price can be a challenge. But if they can understand your overall value, they’ll understand that your dealership will be there to provide customer service and make sure to keep providing good service throughout the lifespan of the customer. Value is always long term. Price is short term.
At Empire Dealer Services, we are focused on delivering value. We are eager to understand your dealership, your needs, and your background. If you’re driven by price, we’ll show you how our services can deliver value in the long run. If you’re focused on protection and security, we’ll share our training and expertise so you can confidently tackle any sale. And, if you’re focused on aesthetics, we’ll make sure to bring the bells and whistles!