LOS ANGELES -- A study of car dealership sales techniques shows that luxury brands often are the most effective deal-closers and also are best at making customers happy. Among mass-market brands, Hyundai, Kia, Ford and Toyota were the leaders.
Among all brands, Mercedes-Benz dealers finished atop the 11-month mystery shopping study by Pied Piper Management Co. of Monterey, Calif. Infiniti finished second, while last year's winner, Lexus, finished third.
Using 5,203 mystery shoppers, Pied Piper repeatedly visited dealerships to analyze their processes and techniques to create the Prospect Satisfaction Index.
Pied Piper CEO Fran O'Hagan said his survey is different from J.D. Power and Associates' Sales Satisfaction Index because Power "only measures everything after the customer says, 'I'll take it.'
"It's all the stuff before then that matters. We're measuring how effectively the sales team sells," O'Hagan said.
Tactics for all brands
Some tactics seem to work best across all brands. Offering a test drive, as well as trying to get the customers to the negotiating table, are more effective at closing a deal. Yet a small percentage of dealerships do neither.
If a salesman is empowered to talk about leasing or financing options — instead of making the customer wait to talk to the F&I department — that's even better at closing the deal. And while being a "friendly museum curator" is seen as an essential tactic for a genteel luxury brands, it doesn't sell cars, O'Hagan said.
Not that everything has improved on the showroom floor, though. While many salespeople sell themselves and the car, fewer salespeople are giving customers a compelling reason to buy from their specific dealership
"The best dealerships have a process. It's not the Wild West where you get to sell the way you want to," O'Hagan said.
Some of the findings for individual brands were intriguing. For instance:
- Hyundai and Kia dealers now offer sales commissions that attract better salespeople, but changing retail processes at those brands also are generating more effective sales tactics.
- Scions are sold from Toyota dealerships. Yet, while Toyota finished near the top, Scion finished dead last. The reason? Shoppers who identified that they were specifically interested in Scions were treated poorly compared to those asking about Toyotas. Fewer Scion customers got product walk-arounds, and fewer still were asked for their contact information. And 17 percent of the time, Scion customers were shoved toward buying a Toyota instead.
- Lincoln finished near the top in the previous survey, but plummeted to fifth-worst this year. A worsening in salesperson behavior across the board fueled the fall, largely because of a lack of product. While every Mercedes dealer surveyed hawked only Mercedes products, at Lincoln, 10 percent of the time customers were pushed toward competing products — at another brand within the dealership group — as a viable purchase option.
- The Chrysler, Dodge and Jeep brands were scattered in the rankings, often because certain products lend themselves to more effective selling techniques. Jeep finished higher because salespeople gave more compelling reasons to buy their product now.
Some brands clumped together in their strengths.
For example, Jaguar, Volvo and Audi salespeople were most likely to discuss features unique from the competition.
Infiniti, Land Rover and Smart salespeople were most likely to conduct a vehicle walk-around.
Kia, Fiat and Hyundai salespeople were most likely to give compelling reasons to buy now.
The best salespeople at talking about financing were those at Cadillac, Infiniti and Mercedes.
This survey, now in its seventh year, received some updates in its mystery-shopping methodology, O'Hagan said.
Traits vs. processes
Questions such as whether the restroom was clean, or if the salesperson smiled, were replaced by more process-based data. The new survey is less about the dealership's physical traits and its location, and more about its processes.
"If you have a brilliant sales team selling out of a circus tent, you are going to do all right in the short term," O'Hagan said. "If you have a lousy sales team in an incredible building, you're in trouble."