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I took some basic information about him. He wanted to pay
cash for the minivan and trade in a 10-year-old Acura with 160,000 miles on it.
Michael, my ASM (assistant sales manager) came in to meet Mr. Park and he began
searching the inventory for a minivan to match his tastes. Finally, we located a
minivan that matched the description and we went outside to look at it.
"It doesn't have running boards," Mr. Park said.
"We'll put them on," Michael quickly said.
Mr. Park inspected the minivan carefully, but he refused to test-drive it,
saying his brother had the same vehicle and he had driven it many times. He also
said he wanted a number of things added to the minivan such as the
aforementioned running boards, fog lights and a rubber scratch guard for the
rear bumper. Michael kept saying it would be no problem to add those things once
the deal was set.
At this point things got sticky. Michael had to go into a meeting so another
salesman from my team, Juan, was brought in to help me with the deal. I stood to
the side in the cubicle and let Juan handle the customer. Just as Michael had
described, Juan filled in the four-square worksheet with the stock number of the
vehicle and the sticker price, $28,318. Mr. Park saw this and began to get
excited, saying he would pay only $24,000 for the minivan. Juan ignored this
early overture, picked up the phone and dialed the new car sales tower.
"I have a Mr. Park with me," Juan told the sales manager. "Don't call the police
but he's trying to steal our car." (Another example of car salesman "humor.")
Juan gave the desk all the extras that Mr. Park wanted added to the minivan. He
then wrote some numbers in the boxes and hung up the phone. He told Mr. Park
that we needed a $6,000 down payment and his monthly payments would be $523.
"I told you, I will pay cash for this car," Mr. Park said. "But I want your best
price. What is your best price to buy the minivan?"
Juan recalculated the prices and told Mr. Park he could have this beautiful new
minivan for only $27,500 plus the cost of the extras. Mr. Park demanded to know
how much he would get for his trade-in vehicle. Juan told him we would give him
$2,500. This sent Mr. Park into a frenzy. He kept insisting the car was worth at
least $6,000.
Juan and Mr. Park went back and forth for about 10 minutes. Then, abruptly, Juan
stood up and left. I sat down and tried to make small talk with Mr. Park. This
was difficult since I could see that he was upset about the way he was being
treated. Juan returned a few minutes later with the four-square sheet on which
the sales manager had written, in blue magic marker: "Great deal! $27,150 for
our minivan, $2,500 for your trade."
When this was presented to Mr. Park, he became agitated, insisting the trade was
worth at least $5,000. Once again, it looked like Juan had gone as far as he
could with Mr. Park. He left and came back with a closer who introduced himself
as Big Stu. At first, Stu was jovial. He pointed at the list of extras Mr. Park
was requesting and asked, "Is there a kitchen sink in here too?" Later, he began
referring to the extras as, "Home Depot."
Big Stu was clearly searching for a way — any way — to get a commitment from Mr.
Park. At one point he pointed at me and said, "And this guy here has never sold
a car before. If you buy this car he gets to pop his cherry."
Unexpectedly, Stu suddenly raised his trade-in value to $4,000. He also said our
minivan could sell for $26,500. Mr. Park accepted this offer and initialed the
sale sheet. He then said he had to go home and get his wife so he could return
and complete the credit application and take delivery of his new vehicle.
I walked Mr. Park out to his car and shook hands with him before he left. I
noticed that whenever I shook hands with him he offered me his left hand. All
other salesmen he shook hands with right-handed or American-style. I wondered if
there was some cultural significance to this. Perhaps he was telling me he
trusted me.
Of course, I began thinking that I had made my first sale — or "popped my
cherry." Mr. Park's new minivan was still parked in front of the dealership, so
I went out to move it back into its space. It turned out the battery was dead.
The minivan had been sitting there so long with doors and windows open that it
drained the battery. If Mr. Park had insisted on a test drive it wouldn't have
started. I went into the tower, and told Big Stu we needed a porter to
jump-start the car. He leaned over the counter and screamed in my face, "That's
not my f---ing job! Call the porter yourself!"
Eventually, a porter with a "jump box" started the minivan. I let it idle for a
half-hour, then put it away. Several hours passed, and I began to feel my first
sale slipping away. Suddenly, I was paged. When I got to the receptionist's
desk, I found Mr. Park with his wife and baby waiting for me. He looked very
excited and happy. Again, he shook hands with me with his left hand. I showed
him the minivan and insisted that we take a test drive. When we returned we all
went back into a sales cubicle.
Somehow, the earlier sales sheet had gotten "lost" and the numbers they had
agreed on were "forgotten." The price of the minivan and all the extras shot
back up and the price of his trade-in took a serious dive. For the next two
hours Mr. Park was hammered by every closer in the dealership. I got to watch a
variety of styles: impatience, cajoling, begging, threats. Through all this his
wife sat by his side clutching their little baby. Mr. Park began complaining
that he had a headache and his manner became increasingly angry. At one point he
ominously muttered, "Don't screw with me."
I couldn't exactly figure out what had happened to the deal. Yes, he had been
offered $4,000 for his trade. I knew that for sure. And I seemed to recall that
he had been offered the minivan, including the extras, for as low as $26,500.
Those extras had not been written into the contract or they had been
conveniently forgotten. They reemerged at the end and completely blew the deal.
Finally, Michael picked up the papers and walked out of the cubicle muttering,
"You're wasting our time."
Mr. Park asked me several times whether or not I had heard the earlier offer of
$4,000 for his trade. I wouldn't commit to this since I knew that I would be
fired if it ever came back on me. When I last saw the Park family, they were
heading across the street to another dealership.
Moments later Michael appeared and said, "Sorry about your deal, but those
people are completely impossible." Actually, he didn't say "those people." He
named an Asian country where, he had earlier told me, the people were all
"grinders." Ironically, in my attempts to make conversation with Mr. Park I had
learned that he wasn't from that country at all. He was from a neighboring
country which wasn't on Michael's list of primo grinders. So here was my boss,
adhering to stereotypes — but doing it incorrectly. That struck me as the worst
of both worlds.
All week Michael had been telling me about the Friday morning sales meeting.
Each time it came up he would say, "Make sure you're on time."
"What happens if I'm not?" I asked.
"You don't want to find out."
Friday morning rolled around and I made sure I was there in plenty of time. The
meetings were held in the lunchroom upstairs and the only way to reach this room
was to climb a flight of outside stairs. All the salesmen were gathered at the
bottom of the stairs, milling around smoking cigarettes and drinking coffee.
Some of the guys were in street clothes, black leather jackets or wearing
baseball caps turned backwards. That was because they were working the late
shift. They had come in just for the meeting and then would go home and come
back again later. Those few lucky salespeople who were off on Friday were
required to come to the meeting. If they didn't they wouldn't be allowed to work
that weekend.
The rules of the dealership are enforced by threatening to send the offender
home. Since we all worked on straight commission, to be sent home meant you
eliminated your chances of making any money. The concept of being sent home
always reminded me of being in grade school. "If you do that again, we're going
to send you home and call your mother."
One day I was standing "on the point" with my hands in my pockets. The point is
the entrance to the dealership where cars pulled in from the street. Another
salesman came up to me and said, "You're not on my team, but you're from Boston
so I'll tell you. If the owner of the dealership sees you standing there playing
pocket pool, he goes ballistic. I got sent home one day for doing that."
Apparently the owner felt we looked idle and inattentive if we had our hands in
our pockets.
Salespeople also got fired at the drop of a hat. This was known as, "getting
blown off." I came into work one morning and heard the guys talking about how
another salesman got fired the night before. He had done something to a customer
that the GM (general manager) didn't like. The salesman was called into the
tower and he stumbled out moments later in a state of shock. He said to the
other salesmen, "I don't believe it, he just blew me off." The GM saw the fired
salesman talking to the other guys and charged out on the lot, screaming, "Get
away from them! I don't want you talking to anyone!"
So the salesmen were very careful to show up for the Friday morning sales
meetings on time. I was wondering what was going to happen in the meeting when
the door at the top of the stairs burst open and loud, pounding music poured
out. The general manager appeared and yelled, "All right guys, get in here!"
We all ran up the stairs, high-fiving the sales managers as we went like we were
taking the field in an all-star game. As we gathered in the room, we were all
clapping to the music that was booming from a stereo set up in the corner. It
was as loud as a rock concert and was playing that music they use at ball parks:
"We will, we will, ROCK YOU!"
The music died and one of the sales managers, a short guy in his forties, with
wavy black hair, ran out in front of us pumping his fists and screaming,
"Killer, killer, KILLER WEEKEND!!!"
We all cheered.
"What are you going to do this weekend?" he yelled.
"Sell cars!" we yelled back at him.
For 45 minutes we listened to motivational speeches from the managers. Then the
GM appeared and told us about the various bonuses. If you sold three cars you
got $250, four cars and you got $350, five cars and you got $500. And then he
added, "If the dealership sells 60 cars, all the bonuses double. Sell five cars
you get a grand. It's that simple." More ballpark music followed this and we
left the room shaking hands and giving more high fives. We were pumped. We ran
outside to sell cars. There was only one problem.
Where were the customers?
I had been warned that Fridays were bad because you have all the salespeople on
the lot and no customers until late in the afternoon. But still, there was a lot
going on. They had set up an inflatable bouncing room for kids, a petting zoo,
and a grill preparing free hot dogs and hamburgers under a tent set up to one
side of the showroom. The smell of cooking burgers began drifting across the
lot. Soon there was a long line of salesman waiting for the free chow.
But that wasn't all. In the lobby, a table was set up and "free gifts" (are
gifts ever anything but free?) were on display. If you came in and test-drove a
car, you got either a key case or a portable camera. I don't think I need to
tell you about the quality of these items. The gifts were handed out by young
women with bored expressions and tight tops.
Moving back outside I saw two people roaming the lot dressed in animal suits.
One was a brown fuzzy bear and the other was a floppy-eared rabbit. Later I
talked to the women inside the suits and they complained about how hot the
costumes were and how little kids kept poking them to see if they were real.
It wasn't until the next week that I finally "popped my cherry." It was about
8:30 p.m. and a couple came through the bushes again. Coincidentally they were
also interested in the minivan — the exact model that Mr. Park had wanted to
buy. Apparently they had been at the dealership next door and just decided to
stroll over to see what we had.
A truck was parked on the lot shining searchlights into the air to attract
buyers. A diesel generator was cranked up to provide power. As I approached this
couple, it was very hard to hear what they said because of the roar of the
generator. But the body language of the tall, heavy-set man in his 30s, was
hostile. His wife was shy. I told them we had more minivans in the back, and
invited them to come with me to look at them. As we walked together I was able
to shake their hands and get some general information about them.
They found a few minivans that they liked but had questions about inventory —
did we have any '99 minivans still available? This was a good chance to bring
them inside. It was also cold out and they were tired from shopping.
Inside, they sat down as I filled out a guest sheet with basic information. They
were surprisingly willing to provide their phone number, address and the amount
they would put as a down payment.
I brought Michael, my assistant sales manager, into the office and he met the
couple. I noticed that he always began by praising the car the customer was
considering, as if they had made a wise decision. He would say something like:
"So you're interested in the minivan. Did you know that's our best-selling
vehicle here? Everyone loves it. It can hold seven people, but it drives like a
car. You can't go wrong with it. And the prices here are the best in the area."
Later, I would learn how this was called raising the customer's excitement
level. If they were excited about the car, they wouldn't be rational when it
came to making a deal.
Naturally, the couple began asking about the price of different models. Michael
pointed to me and said, "He'll take you back out to the lot. Find one or two
minivans you like. Get the stock numbers and we'll get specific about payments.
How's that sound?"
We went back outside, and located a minivan that was buried deep in a row of
trucks. The couple made their choice based on color and sticker price. We went
back inside, and Michael quoted them a monthly payment of about $550. The man
balked at these figures saying he had been given lower numbers by another
dealership. Michael countered by saying it was difficult to compare two vehicles
with different options.
"I just had an idea," he said. "There may be a rebate on this vehicle we could
use to bring the payment down. I'll go see if it's still in effect." He
disappeared into the sales tower.
Whenever someone failed to accept the "first pencil" (the high numbers they
begin with) Michael would always have "an idea" or "remember" a rebate or
special interest rate program. This avoided the head-to-head confrontation. It
also promoted the sense that we were working in the customer's best interest.
When Michael left to go to talk to "the desk" (the sales managers) I sat down
with the couple and made small talk. I noticed that the man had his cellular
phone out and was punching the keys. I asked if he was playing computer games.
He smiled and said, "I'm playing a game called 'calculator.'" I realized he was
running the numbers Michael suggested. It struck me that this might be a good
way to check numbers at a dealership. If a customer whips out a calculator it
could really tick off the salesman. But we're getting used to seeing cellular
phones in everybody's hands.
Michael went back and forth with the guy several times, but they seemed to be
settling on monthly payments of $475. Finally, Michael held out his hand and
said, "Do we have a deal?" They shook hands.
If the minivan was selling for a sticker price of about $24,000 with options and
tax, a 60-month loan at 9 percent interest would be $475 a month. However, I
later checked prices and saw that this van should
have been discounted about $1,700 from the sticker price. Then, monthly payments
at 9 percent would have been $430 a month. Over the life of the loan this was a
$2,520 difference.
The long paperwork process began. They ran a credit report and the couple had a
good score. Still, they needed to sign the contracts in the finance and
insurance room, or "F&I."
The dealership was closed now, and most of the salesmen and customers had left.
But I had been warned that we would stay as long as it took to get the deal
done. After about a half an hour, one of the sales managers told me to move the
couple into the "fish room." This meant I was to put them into a waiting room
built around a large aquarium. Apparently, it was thought that gazing at fish
relaxes people.
Later, Michael told me that on weekends he doesn't like people to go into the
fish room. "I've had a couple of deals blow out of the fish room. They start
talking to each other, comparing deals and payments, next thing you know one of
them is pissed off and they leave. I like to stay with the customer the whole
time."
Luckily, my customers were the only ones in the fish room. I took the minivan to
the service department and told a porter to wash and detail it. Then I took it
down the street and bought a full tank of gas. It's funny because, here is a
customer who has just spent about $24,000 on a new minivan. But when you tell
them you're buying them a free tank of gas they get all excited.
Back inside the dealership, I checked on the couple in F&I. Apparently, they
were having difficulty approving the $3,500 down payment on their American
Express card. It was after midnight and the approval office was closed. By now
this poor couple was slumped in their chairs utterly drained. Michael pulled me
aside and said, "If their credit card doesn't go through you're going to have to
follow them to their house and get a check." Eventually, the charge was approved
and the people were allowed to buy their new minivan. We gave them a short
demonstration of all the features and they drove off into the night.
By now it was 1 a.m., but I still wasn't done. The desk manager told me I had to
put up "the blocker" — a vehicle parked across the entrance to prevent the new
cars from being stolen. This was part of the nightly ritual called "lock and
block." You check to make sure all the vehicles are locked, and then you move a
car to block the entrance.
I put the blocker in place, and told Michael I was leaving. He shook my hand.
"Congratulations on your first sale," he said.
I asked him how we did on the deal.
"The problem was, he made me bargain against the other dealership. But we sold
the car for sticker. That's the good part. There'll be $300 or $400 in it for
you."
Actually, when I got my voucher, I made a $501 commission on a payable gross of
$1,689. Our commissions
were paid twice a month. But we received vouchers within a day or two showing
how much we had to look forward to. The vouchers were yellow carbon copy slips
from the dealership's books. The salesmen kept the vouchers in their wallets and
took them out to show each other like scalps.
A friend came up to me on the lot one day and said in a confidential voice,
"Want to see a bomber?" He unfolded the voucher and showed me the yellow slip:
$1,274. "Is that unreal or what? What a bomber." If his commission was $1,274
(30 percent of the dealership's profit) the dealership made $4,242. That's a lot
of profit to make on a $25,000 car — about 16 percent.
From my commission check it was clear that the minivan couple could have made a
better deal and saved several thousand dollars. So where did they go wrong?
Well, first of all, they negotiated as monthly payment buyers, rather than
bargaining on the purchase price of the vehicle. When you agree to be a "monthly
payment buyer" several variables are introduced that are harder to keep track
of: the term of the loan can be extended up to 72 months (six years!) without
your awareness and the interest rate can be raised. When you bargain on purchase
price, it is a cleaner, simpler way of negotiating.
After my minivan customers left that night, I went back into the new car tower
to check out. I looked up at the enormous white board on the wall that listed
the salesmen on the lot. The sales manager was coloring in a blue box next to my
name. My first sale. I was finally on the scoreboard.
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