April 1, 2008

Audi, BMW, Lexus and Mercedes-Benz: Three Lessons From The Salespeople

I've been mulling over what to do when the lease on my BMW ends. As you know, I couldn't find my previous salesperson from last time. I've visited dealerships selling Audi, BMW, Lexus and Mercedes-Benz. The salespeople are among the best. Here are three lessons for advisors in financial services
  1. Understand your client
  2. Cut the clutter
  3. Stand apart
Understand Your Client
Not a single car advisor took the time to truly understand my needs and wants. Performance or comfort? Buy or lease? Roomy or easy to park? Gas guzzler or friend of the environment?

They took the easy escape, talking about the product features. Two even gave instructions on how to tune the radio --- which is no longer easy --- before the test drive (during which I turned the radio off). Would you buy a car because of the radio?

Cut The Clutter
There was a tendency to provide useless data such as
  • BMW makes more types of engines than anyone else [so what?]
  • Audi has the lowest residual values [44% after 3 years on an A6 vs 54% on a BMW 5-series or 59% on a Mercedes E-class] because they are more realistic [which leads to the highest lease rates and loses sales!?!]
  • confusing technical details comparing All Wheel Drive systems among manufacturers
  • Lexus offered complicated lease options with extra lump sum deposits before I had finished test driving vehicles from other manufacturers
Simple is hard. Maybe we overload our clients too.

Stand Apart
Highend cars cost megadollars but dealerships pinch pennies. Audi didn't print a lease quote and only gave a rough (uncompetitive) verbal estimate. At BMW, the printer didn't work on the first visit or even three weeks later, but the sales rep wrote down the key figures. They had an X5 in the showroom but not to test drive. In contrast, Lexus took a GS out of the showroom.

The exception was Mercedes-Benz, which runs their own dealerships. This is a huge competitive advantage. The facility was spacious and impressive --- a great first impression. At the reception desk, I said I was interested in the E-Class and immediately got a thick glossy booklet. The sales rep offered me coffee (which I declined) and then cappuccino (which I accepted). He also asked for my business card (following proper business card etiquette) and drivers license. When we sat down, he started entering my contact information while I reviewed sections he pointed out in the booklet.

No other dealership offered
These little things make a lasting impression. In financial services, I still see advisors who don't use colour printers, nice paper or nice bindings (e.g., folders or binders). A shiny new car communicates eloquently but insurance is intangible, a promise on a piece of paper. Doesn't that demand high quality handouts to help show that you're good --- especially if your firm isn't a household name?

The overall experience was disappointing. And this is before the dreaded negotiation process. Do our clients fare any better at our hands?

Update: The car purchase: recovering from bad service

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