RPM Accelerators: Increasing Appraisal Closing Effectiveness

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By Steve Miner

Top auto­mo­tive retail­ers focus­ing on Retail Per­for­mance Man­age­ment (RPM) are mani­a­cal about hav­ing deep vis­i­bil­ity into their busi­ness. The top RPM deal­ers have found that focus­ing on Appraisal Effec­tive­ness is often the first key ele­ment to boost­ing Retail Sales Efficiency.

How good enough is good enough when it comes to an appraisal clos­ing rate? With the aver­age con­sumer vis­it­ing less than 2 deal­er­ships in per­son being north of 50% when it comes to an appraisal clos­ing rate is the mark to aim for. So what are some steps to take to get there?

• Take the guest with you on the appraisal 100% of the time. In fact…insist that they ride along. While this can some­times be painful, the ben­e­fits are worth it. It estab­lishes a rela­tion­ship and rap­port with the cus­tomer and have the oppor­tu­nity to explain the appraisal process. The best benefit…90% of the time they spill their guts on every­thing you want to know about the car you are about to buy from them.

• Have a Retail First Men­tal­ity. Don’t get me wrong…books and auc­tion data are impor­tant and should be looked at. How­ever, the retail-ability of the car is king when it comes to what it is worth to you. Dig deep into the cur­rent mar­ket list­ings, mar­ket days sup­ply, aver­age mileage, total num­ber of list­ings, etc. to know exactly what you are com­pet­ing against. Fol­low that up with your recent sold data to know how you per­form on the car and what you sell it for. This allows you to know when you can step up on cars, or when to scale back on units that there is not high demand for.

• “Call” the car to at least 1 other per­son. This is the old 2 heads are bet­ter than 1, 3 heads are bet­ter than 2…. I do an exer­cise where I have a room full of used car man­agers appraise a vehi­cle indi­vid­u­ally, and then break into groups and appraise the same car a sec­ond time. The spread on the ACV and recon is huge when done by indi­vid­u­als, and shrinks to an extremely small amount when com­par­ing groups.

• Deliver the appraisal your­self! When you are busy this can be tough, but no one knows how you arrived at the value or how to over­come the objec­tions bet­ter than you. This cou­pled with the rap­port you built dur­ing the ride along can be the final straw to clos­ing the deal. Maybe this is not needed with your top sales peo­ple but def­i­nitely with newer team mem­bers or those who are underperforming.

• Deliver the Appraisal using a Pro­fes­sional Offer Form. Build trans­parency in the process and show you stand behind your offer. I often hear deal­ers say that they won’t do this because the cus­tomer will just walk next door to their com­peti­tor and get a bet­ter deal. What per­cent­age of the time that a cus­tomer walks because they don’t like your deal do they come back cur­rently? Show them you are con­fi­dent in your offer and stand behind your work.

Read the entire arti­cle by Steve Miner, Direc­tor of Prod­uct Mar­ket­ing at First­Look and MAX Systems.Contact him at info@firstlook.biz.

 

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