The Best Way To Overcome Today’s Price Objections
Whether training sales managers for an OEM or a call center for a single-point dealer, the concern posed more than any other recently is how to overcome price objections on the phone in today’s transparent environment. Most dealers, you see, do a decent job of managing objections to price on the lot – where they struggle most today is when this question is presented over the phone.
Despite nearly ubiquitous pricing transparency facing automotive retailers, many dealers still rely on an old school answer to the “Is that your best price?” question:
“No, that’s not our best price. We reserve our best price for people who’ve selected and test driven a vehicle. It does neither of us any good to work out a price if it’s not the perfect fit for you. Your presence in our dealership is your leverage, and if you’ll schedule and keep an appointment with me, I can guarantee that once you’ve selected and test driven a vehicle, I will get you the very best price.”
While this answer worked spectacularly in the past; in a price-transparent environment, answers like this may appear less than honest to consumers. Moreover, if you’re like most dealers and you’ve already priced your used vehicles at or very near their expected selling price, then an answer like this isn’t going to work for you.
Market-Based Pricing Triple Discount
While market-based pricing strategies have helped dealers turn their used car inventories faster, too many of the dealerships I observe have fallen into the familiar Triple Discount Trap with their market-based pricing efforts. Here’s how it works:
You price your vehicles online at the market price – this is the first discount. Then, when a consumer calls and asks for your best price, your salesperson or BDC agent shares with them some “e-price” you’ve authorized them to provide (usually a couple hundred dollars below the online price) – this is now your second discount. This means your prospect is already armed with two discounts from you before they ever arrive on the lot to see the vehicle in person. Dealers who’ve provided two discounts to consumers know that the first thing these prospects want to do when they arrive on your lot is to start negotiating to get to your best price – the third discount.
That’s the Market-Based Pricing Triple Discount!
Dealers already priced to market can stop giving three (or more) discounts to internet customers by changing the way they answer the “is that your best price?” question. That is, with the very first interaction.
When your vehicles are priced at or near the expected selling price, and your team gets the price call, they need to be ready to answer in a way that affirms the price you’ve posted online. They need to be strong enough to allow you to hold the remaining gross; and they need to create enough urgency that the prospect will come in today to test drive and buy. The talk track my clients have used successfully goes something like this:
“If you’ve been shopping online then you know we price all of our vehicles competitively right from the beginning. We would never dream of insulting our customers by showing you our second best price and then making you jump through a bunch of hoops to find some hidden best price. Now, that Taurus is priced to sell at $16,359 and it will likely not be here by the weekend at that price. I do have two test drives open on that Taurus this afternoon. I have a 12:15 and a 12:45. Which one works better for you?”
In this scenario, your team has affirmed the price using verbiage strong enough to allow you to hold the remaining gross, while creating the necessary urgency to get any truly interested prospect to show up for an appointment. Moreover, if your floor team sticks to a similar talk track, you can expect to sell this vehicle for your original asking price.
Does This Work For New Cars?
While most every dealer is advertising their used cars near the selling price, there are certainly fewer dealerships that advertise new cars this way. Whether they’re in a less competitive situation that doesn’t demand market pricing of new vehicles, or their OEM ad covenants do not allow the practice, they don’t divulge their asking price until a prospect makes an inquiry.
If this describes your dealership, then you either never disclose selling price over the phone (using the old school talk track I referenced near the beginning of this article) or you’ve equipped your team with a matrix of new car pricing, by trim level, that they are allowed to quote. If the latter describes you, then you often get calls from prospects who claim to have a lower price from one of your competitors.
The prospect tells your team something like “I’ve got a lower price on that truck from Competitor A – they beat you by $300. If you can beat their price, I’ll buy from you.”
When I see this happen today, the salesperson runs to the desk to get another $400 below the matrix price (discount number two); though there’s no worry that the prospect will want to negotiate for discount number three when they arrive, because they’re not coming in. They’re trying to squeeze Competitor A to ensure they are getting the very best price. You might not even be beat on price – and there’s a distinct possibility that the prospect is actually sitting in Competitor A’s showroom when they make the call.
If you’d like to win more of these than you are today – and you want to hold some gross in the process – then you must avoid negotiating over the phone and respond with something like this instead:
“We wouldn’t have lasted more than 45 years in business if we weren’t always competitive on price and we will not lose ANY deal over price. If we cannot meet or beat your best valid written offer on an in-stock unit, we will fill your tank with gas and give you a $100 gift certificate to Olive Garden. So, if you’re ready to test drive that Accord, I’ve got two test drives open on that Accord this morning – I’ve got a 10:15 and a 10:45. Which one works better for you?”
In situations like this where the prospect is (A) unwilling to come in and (B) trying to squeeze us over the phone, it’s important to bury the dead. It’s important to move on. It’s important to call their bluff.
What if there is no Competitor A?
Of course, new car pricing questions over the phone don’t just surface in the face of competition. Often, we get these questions early in a consumer’s buying journey and before they’ve had a chance to connect with our competitors. In these cases, where we’ve provided our matrix price and the prospect asks “is that your best price?” it never pays to come off the quoted price, even if we have a few hundred dollars left to give. By staying firm at the matrix price and using a talk track that focuses on the test drive, we have a better chance of actually selling a car today:
”We would not have lasted more than 45 years in business if we were not always competitive on price. Plus, we would never dream of insulting our customers by giving you our second best price and then making you negotiate to find some hidden best price. That Camry is priced to sell at $31,399 and it will likely not be on our lot much longer. Now, I do have two test drives open on that Camry this morning. I’ve got a 10:15 and a 10:45. Which of those works better for you?”
While this article was written to help you overcome today’s pricing questions over the phone, many of you will wonder how you answer the next objection out of the prospect’s mouth once you’ve recited the talk track above: “I’m not ready to buy yet, I’m just gathering information, I plan to buy in about 2-3 months,” so here’s a bonus:
“That’s great to hear, Mr. Jones! I’m glad I was able to provide you with today’s pricing on the new Camrys. Of course, that price included today’s discounts and incentives which will surely expire by the time you’re ready to buy. So, why don’t we do this: let’s test drive that Camry and look at how today’s incentives might make a difference. Now, I’ve got two test drives open on that Camry this afternoon, I’ve got a 2:45 and 3:15. Which one works better for you?”
Armed with these talk tracks and a little confidence, your team won’t win them all, but they’ll surely win more than they are today – and at higher grosses!
Steve Stauning, creator of The Appointment Culture and an expert in The Customer Experience. He is also an extremely popular keynote speaker, writer, and industry consultant. Learn more about Steve at SteveStauning.com.