Sell Less Cars & Make More Money

Not too long ago, collections had a core philosophy in one fundamental element; “You have an obligation with this debt.” A car, a credit card, even a house were obligations to a commitment made in order to receive goods or services. When a collection issue came up, that basic truth dictated how the collection process would proceed. The basic premise was, “You owe this debt. You agreed to pay it, so do the right thing…pay it!”

As the demographics in the consumer base evolve, the approach to advertising, sales and even collection practices must evolve in order to be effective within that demographic. At one time, credit was something held very dear to most people. It was not to be used unless it was an absolute emergency or to purchase a home. Many will remember when a credit card was manually imprinted on a double receipt. Before computers, and all of the automation and background checking, it was used based on another basic principal, “Trust”.

Relationships coupled with trust are the key to minimizing loss while increasing cash flow. Let’s say you loan a friend $100. Your friend agrees to pay you when he gets paid this Friday. Your friend comes to you and says, “I’m sorry, I only have $75. I had to pay for some medications after I caught the flu.” Would you say, “No! If you don’t have the entire $100 I can’t accept it.” Of course not. You would take the $75 and work out something for the other $25. You thought enough of your friend to loan them the money. What if this friend had a history of borrowing and not paying back loans with your circle of friends? Then the question would be, “Why would you loan the money with the expectation of a different result?” Historically, they had shown not to pay. So whose fault would it be when they default?

The relationship starts during the sales process. Treating customers in an honest and fair way by explaining all of the details of the deal and making sure they are able to fulfill those obligations are the beginning of a good relationship built on trust. Failing to put your customers in the best position to succeed is not only wrong, it’s bad business. The day your customer purchases the car is one of the happiest days they’ll experience during the term of the loan. This is the opportunity to explain their responsibility and that making a car payment is usually not easy. What do they do if they can’t pay all or any of their payment? It is a used car and it will require repairs at some point. Are those repairs covered by warranty? Are they responsible for the cost? Is the payment still due if it isn’t running? This is the first and only opportunity the dealership has to set the tone for the relationship. The more (potential) issues you can address during the beginning of this relationship, the more likely the relationship is to make it to the goal of any BHPH/LHPH deal, Payoff!

“Sell less cars, and make more money.” This principal is not only more profitable requiring less cash flow, it provides much better service to your customers and even your community. The way to do that is through building a relationship built on trust. Not only trusting that the customer will fulfill their obligation, but that the customer can trust we the dealer fulfill ours.

– Roger Newton, February 15th, 2019 

The Business Will Provide a Uniformly Predictable Service to the Customer

While the business must look orderly, it is not sufficient; the business must also act orderly. It must do things in a predictable, uniform way.

I went to a barber, who, in our first meeting, gave me one of the best haircuts I ever had. He was a master with the scissors and used them exclusively, never resorting to electric sheers as so many others do. Before cutting my hair, he insisted on washing it, explaining that the washing made cutting easier. During the haircut, one of his assistants kept my cup of coffee fresh. In all, the experience was delightful, so I made an appointment to return.

When I returned, however, everything had changed. Instead of using the y, he used the shears about 50 percent of the time. He not only didn’t wash my hair but he never even mentioned it. The assistant did bring me a cup of but only once, never to return. Nonetheless, the haircut was again excellent.,

Several weeks later, I returned for a third appointment. This time, the barber did wash my hair, but after cutting it, preliminary to a final trim. This time he again used the scissors exclusively, but, unlike the first two times, no coffee was served, although he did ask if I would like a glass of wine. At first I thought it might be the assistants day off, but she soon appeared, busily working with the inventory near the front of the shop.

As I left, something in me decided not to go back. It certainly wasnt the haircuthe did an excellent job. It wasnt the barber. He was pleasant, affable, seemed to know his business. It was something more essential than that.

There was absolutely no consistency to the experience.

The expectations created at the first meeting were violated at each subsequent visit. I wasnt sure what to expect. And something in me wanted to be sure. I wanted an experience I could repeat by making the choice to return.

The unpredictability said nothing about the barber, other than he was constantlyand arbitrarilychanging my experience for me. He was in control of his experience, not I. And he demonstrated little sensitivity to the impact of his behavior on me. He was running the business for him, not me. And by doing so, he was depriving me of the experience of making a decision to patronize his business for my own reasons, whatever they might have been.

It didnt matter what I wanted.

It didnt matter that I enjoyed the sound of the scissors and somehow equated them with a professional haircut.

It didnt matter that I enjoyed being waited on by his assistant.

It didnt matter that I enjoyed the experience of having my hair washed before he set to work and that I actually believed it would improve the quality of the haircut.

I would have been embarrassed to ask for these things, let alone to give my reasons for wanting them. They were all so totally emotional, so illogical. How could I have explained them or justified them, without appearing to be a boob?

What the barber did was to give me a delightful experience and then take it away.

What you do in your business is not nearly as important as doing what you do the same way, each and every time.

-Anonymous, January 25th, 2019