In the last few years,  I have several times been invited, as a prelude to training programmes, to address teams of Sales Managers on how to grow their business without simply sacrificing profitability.  This article is a blend of the content of those addresses.

Your Market Pie

For the sake of this discussion, the pie represents the sales market you compete in, i.e., the available new sales every month.

You get your share of the market, and in a well-developed, highly-saturated market it probably doesn’t vary too wildly.  If you averaged 10% of your market last year, you may go up or down a little this year, but it’s highly unlikely that you’ll get 20% or 5% this year.

The natural tendency, (admittedly often driven by manufacturers’ or business owners’ short term focus on sales targets)  is to try and cut a bigger slice.

Let’s say you normally average 10% of the market and you decide to go for 12%.  The fastest way to try and do this is to sell cheaper.  So you start discounting harder but this doesn’t just affect you – it affects your competitors as well, who may have to match or beat you on price.   It’s not uncommon for every business to have ‘loyal’ customers who will buy from their regular supplier, but will get a comparative price from another supplier, just to check.  As more businesses blindly pursue volume on price, our research shows that they don’t create many more customers, but they give even more money to the customers who were going to buy their product anyway.  Money for nothing!

Imagine that your market is a ‘money pie’ and, having made the first cut into the money pie each month, you are moving the knife into position to make the second cut that will define your slice of pie.   The further you move your knife, the thinner the pie becomes.  So by trying to simply cut yourself a bigger slice, you get less and less pie ‘filling’ and end up with empty pie crust.

The wider you cut, the flatter the pie gets – but not just for you – for all competitors in your market.   This is a compounding problem as you then educate your customers to expect bigger and bigger discounts.  You may even lose your astute customers who are suspicious of this sales desperation and are aware of what this activity does to things like service, attention to detail and (if applicable) resale value.

What to Do?

As a Sales Manager, there are broadly two approaches you can take to get a bigger slice of pie:

1.    Try to Cut Yourself a Bigger Slice as fast as possible

2.    Make the Pie Bigger

Let’s look at these two choices in more detail…..

1. Cutting Yourself a Bigger Slice

This is what you do when you get desperate for sales numbers or market share.  You just try to grab any deals you can.

Some activities associated with this choice include:

•    Taking a broad ‘shotgun’ approach to marketing.  Examples: Advertising on mass-marketing websites, deliberately marketing outside your Prime Market Area.

•    Giving prices other than RRP over the phone or publishing discounted prices on the internet.

•    Letting salespeople sell management instead of the customers.  Example: A customer starts discussions with the salesperson with price and within a minute or two the salesperson is standing in your office with a credit card and a ludicrous price offer, trying to ‘sell’ you on why you should sell at a significant loss.

•    Little or no sales training

1a.Effects of Cutting Yourself a Bigger Slice

•    Detrimental effect on customer service, customer satisfaction.

•    ‘Rewards’ the customer for shopping around, so encourages them to keep shopping around, not buying. Often confuses the customer and gets them to buy the wrong product for their needs.

•    Significantly reduces the profit for yourself and other businesses in your market.

•    Sets new discount benchmark for customers, making future profit even more challenging.

•    Reduced available sales opportunities because there is less profit to invest in creating new business.

•    Less profit to invest in facilities, staff, training, goodwill, stock.

•    Loss of profitable repeat and referral business.

•    Educates and rewards salespeople to be lazy, undisciplined and unprofessional.

•    Detrimental effect on resale values, if applicable to your market (deterioration of another sales advantage v. your competitors’ products)

•    Reduced ability to attract quality sales staff due to reduced remuneration.

•    The size of the pie (and your sales) are at the mercy of the market / economy.

•    If everyone’s trying to cut the pie thinner, but no one’s growing the pie or baking bigger pies, this has a shrinking effect on your potential market size.

2. Making the Pie Bigger

This is what you do when you stay committed to fulfilling the full array of customer needs, selling value over price, and aiming to retain a fair gross profit and build customer satisfaction.

Some activities associated with this choice include:

•    Targeted marketing:    to your existing client base and to your Prime Market Area.

•    Focus on providing personal service and maintaining enough gross profit to keep the business sustainable long-term.

•    Implementing systems and procedures to ensure customers receive professional, effective service and a better experience.

•    Regular training of your sales staff to develop a higher level of sales and customer service skills.

2a. Effects of Making the Pie Bigger

•    Improves customer satisfaction and customer loyalty levels.

•    Educates the customer that shopping around isn’t necessarily the best way to get true value for money.

•    Buoys the profit for yourself and other suppliers.

•   Doesn’t create future unsustainable price expectations in the customer’s mind.

•   Increases available sales opportunities because there is more profit to invest in creating new business.

•    More profit to invest in facilities, staff, training, goodwill, stock, etc.

•    Increase in profitable repeat and referral business from satisfied customers.

•    Educates salespeople to be more service-oriented (instead of price-oriented) and more disciplined.

•    Enhanced resale values (increases sales advantage v. your competitors’ products)

•    Better ability to attract quality sales staff due to better available remuneration.

•    The size of the pie (and your sales) become more insulated against the economy / market.

Some Suggested Actions (for making the Pie Bigger)

Marketing to your existing clients and your Prime Market Area is an extensive topic, so in the limited time we have available today, I’ve chosen some sales enhancement suggestions.

Furthermore, marketing has the potential to be a huge waste of money unless you have the systems and procedures in place to accurately track and convert the resulting enquiry into sales.   Here are some suggestions, or reminders on effective ways to make the pie bigger:

1. Measure the size of your discounts and over-allowances, not your retained gross.

By simply measuring gross, we can congratulate ourselves on the $50,000 gross profit we made for the month, perhaps from making 100 sales.  Instead of counting how much we kept, if we count how much we gave away and aim to minimise it, we are already taking a perspective that is conducive to better gross (having to then justify the price difference, encourages salespeople to professionally justify pricing, focused on the customers’ needs).

2. Test your salespeople’s knowledge of your USPs (Unique Selling Propositions)

Without warning, call your salespeople into your office one at a time. Ensure you won’t be interrupted.

Ask them what is their best selling product in your range (it may vary for different salespeople).

Then ask them what is the most common competitor they are up against on that model.

Then ask them what are the top 5 benefits of their top seller v. its No. 1 competitor.  If they don’t know, or give you fluffy answers like ‘styling’, ‘finish’ or ‘design’ then they are losing you tens of thousands of dollars.

Note: A salesperson knowing the answers to this is not even the ideal situation, as an effective sales professional will be far more advanced from this, but them not knowing is very damaging to your business.

3. Test your salespeople on BEST PRICE demands

Separately from the previous exercise, call your salespeople into your office one at a time.  Ensure you won’t be interrupted.

Tell them you are going to role play a customer and you want them to respond as they would to a customer.

Tell them you’ve just met them (as a customer), and then ask them: “What’s your best price for a (specific product that you sell).”

You can be as blunt as you like in answering any questions they may ask you, but observe their responses.

They get this Best Price question in different versions every day.  This is one of the most basic challenges your salespeople get.  A salesperson not being able to effectively handle best price request in the first five seconds is a bit like a professional boxer not knowing how to avoid being punched.

If they stammer and stutter, or say “aaaaaaaaaah, ummmmmm”, they are leaving thousands of dollars on the table.  They should be able to handle this confidently in their sleep, it is so fundamental to most businesses.

Salespeople who do poorly in this exercise may say that this is not a “real-world” situation and tell you all the reasons why they would do better with a “real” customer, but when put on the spot, salespeople don’t become wildly creative and imaginative.  They default to habit.

Do not ask them how they would handle it – they can probably know and describe what to do without necessarily doing it with a customer.  Make sure it’s a role-play.

As a guideline on how Best Price can be handled more effectively, ask about our ‘best price’ training courses.

4. Customer Needs before Negotiation

Our company offers over 20 negotiation strategies in training, but if you don’t know anything about your customer other than that he/she wants a particular product for a ridiculous price, then effective negotiation strategies (as opposed to rubbish like “let’s meet half way” and “if I could, would you?”) are rendered useless.

To negotiate effectively, we must have accurate information about the client’s needs.

Without information, we are neglecting our customer service duty and most salespeople in our industry put their business into these neglectful situations with customers every day.

Train your salespeople to get more relevant information and better information to get you the right customer focus for completing a sale.

Don’t let your salespeople walk into your office unless they have a list of the customer’s needs (including, but not limited to price).

5. Track your enquiry

Measure every enquiry, even the ‘tyre-kickers’.

At one business I work with in the first month of tracking, the Sales Manager had just accepted that one salesperson was having a particularly quiet month.

He finally analysed his tracking and found that the salesperson had spoken to 71 customers to make one sale, and had dismissed 70 ‘tyre-kickers’.

Focus on improving your closing ratios, not finding more people from other PMAs to talk to.

With many manufacturers recently running promotions with low interest rates, many salespeople have encountered customers coming in and mentioning the advertised finance deal.  Unthinking, unprepared salespeople immediately refer the customer to the F&I Manager then wonder why the customer got a lot of info about the finance and then left without buying a car.

In response to requests from numerous clients we put together some strategies for salespeople asking customers about vehicle finance:

1. Focus on Customers’ Needs

Customers’ needs are their greatest motivation to do anything, including buy a car from us.  There are six categories of logical needs and six categories of emotional needs.  We cover these in our sales training.

Because customers’ needs are the greatest motivation that the customer has to do anything, it should be the primary focus of the salesperson to investigate, identify and develop those needs.

When salespeople do not accurately and comprehensively find out the customers’ needs, they have automatically and significantly reduced their chance of helping those customers buy the right car.

One of the easiest traps for salespeople to fall into when there is a promotion is on is for the salesperson to focus on the promotion and automatically make assumptions about the customers’ needs relating to the promotion.

For example, with finance promotions (like an advertised low percentage finance rate), we have heard of salespeople who expect customers to come in fully prepared to buy immediately based on the low finance rate.  Poor salespeople shortcut the sales process and rush to close and scare the customers away.

So even though the low finance rate offer may have got the customer curious to contact your dealership, you should still conduct a full and proper ‘Road to a Sale’ process and properly establish all of the customers major needs before showing the car, test driving, and negotiating.

I recently spoke with a Sales Manager who is doing well with his manufacturer’s low finance rate offer.  I asked what he is doing to get such strong results and he confirmed: “The customer is in the showroom because they want to buy a car, so we are going back and asking about all their vehicles needs first, then talking about the car and then revisiting the finance offer only when we have established the right car for the customer’s needs. The finance is a closing tool, not the entire sale.”

2.  It’s not all about the Finance

As a sales professional, you should have a planned, prepared printed check list of questions and information that you cover with every customer before they start looking at your cars.

When you use a check list with your customer:

1.    You don’t forget to ask any important questions about the customers needs (that may cost you or the customer unnecessary time, money or a deal later on)

2.    The customer can see that you are professional, organised and methodical.

3.    The customer can see that you ask these question to every customer so they are not personally being targeted by questions such as:

a.    How do you normally finance your vehicle?
b.    Who else is involved in the buying decision?
c.    When do you need your new car?

4.    You have a clear set of priorities for your presentation and test drive, based on the customer’s needs.

5.    You have high quality information to follow up with, instead of simply throwing away the dealership’s money to apologise for your poor sales skills and customer service skills.

6.    You have a check list of the customer’s needs to summarise before closing, which is scientifically proven to improve retained gross, sales closing ratios and CSI scores.

7.    You are able to better equip your sales Manager for an effective double-close.  Instead of blindly coming out to the customer and throwing away money, a professional sales manager can revise the customer’s needs and make beneficial suggestions or alternatives that do not necessarily involve sacrificing gross.

8.    You have quality information about the customer’s needs to provide accurate and relevant information, invitations and opportunities to the customer in future marketing.

Initially, your blank check lists should be kept in a clipboard or similar.  After a few months, you should know what, if anything needs to be amended.  Then get your customer needs sheets printed in pads, with pages numbered for greater accountability and follow-up.

Furthermore, as a Sales management tool, if a salesperson has not completed the customer needs sheet, he/she should be refused entry to the Sales Managers’ office to discuss a ‘deal’.  If the salesperson has not done his/her job properly up this point, it is going to cost the dealership a lot of time, effort and money trying to secure a deal that has not established, let alone met, the customer’s needs.

3. Get your Wording Right and Practise

Earlier this year I went to the best restaurant I have ever experienced in my life.  I lost count of how many things they did perfectly with the service, the food and the wine.  It all started when we arrived, they asked: “What name is your reservation in?”  This implies a 100% expectation on their part that they were expecting us and that we were welcome.

Most restaurants ask: “Do you have a reservation?”  This implies at least a 50% expectation that you do not have a reservation.

Along similar lines of thoughtful questioning, I’d recommend asking a customer about finance like this:

1a) “How do you normally pay for your cars?”  OR:  “How do you normally finance your cars?”

<<Customer answers the question>>

1b) “So will you be doing the same this time?”

Asking this way implies that you naturally expect that the customer has bought cars in the past and CAN afford our cars, instead of “How do you intend to pay for THIS car” could be taken to mean “we don’t think you can afford it.”

This can now open the line of relevant questioning to include each of the following shown on the “Customer Requirements Form” about the customers current car.  Practise it with a colleague so it comes out naturally when you are in front of a customer.

Make sure that the customer can see your Customer needs pad clearly so that they can see that this is a question that you ask every customer.

4. Timing (not speed) is Everything   

The question about vehicle payment/financing should be asked in the first ten minutes with the customer in the Needs Investigation. The perfect time to do this is when sitting down with your customers after offering them refreshments.

One of the most common mistakes when completing the customer needs form is that the salesperson starts selling.  This is the investigation stage, not the presentation stage of the sale.

If the customer says “finance” and the salesperson immediately starts pushing finance, most customers will shut down and the salesperson will lose the opportunity to find out all of the customer’s other needs, severely jeopardising their chance to help the customer buy the right car car at the right price.

Find out all the customer’s needs before you start selling.

If the customer says “finance”, make a note of it, acknowledge it and keep going through the other question to establish the customer’s needs.

Once you have a complete summary of the customer’s needs written down,  the car can be presented and test driven focusing on the customer’s needs, and then you can then put the full picture together for the F & I Manager to suit the customer’s situation.

I continue to be amazed at how many businesses I discover that do not measure or track their sales activities in any meaningful way.

Here are some of the guiding principles I recommend for businesses that are introducing sales tracking.

1. Salespeople must log as much enquiry as possible.

• Even customers who are, for example, browsing to dream of a lottery win
• If we’re getting 10% lottery dreamers, something is wrong and need closer scrutiny.
• I’d suggest that the word ‘nowhere’ be refused in salespeople’s reports: it allows salespeople to lazily pre-qualify.
• Set language guidelines for your salespeople, encouraging positive assessments and articulate descriptions of customer needs.

If we’re genuinely getting lots of long-term buyers etc., we can reassess our advertising brief, our sales training agenda and other aspects of our business planning.

2. Assess if it’s being logged:

• Randomly (but at least once a week) check if enquiries just in have been logged
• Organise a phantom shopper simply to see if the enquiry gets logged.
• Perhaps offer rewards to anyone who logs 100% (based on your checks) for the month

3. We May Not Get 100%, but 95% is better than 50%

All judgments based on tracking results, from staff feedback to training to advertising, can be made with greater commitment and confidence with more accurate tracking results.  So aim to get 100% of all enquiry tracked so that you have the largest possible sample size of enquiries (and maximum follow-up opportunities) to work with.

4. Introduce, and Use Religiously, Mechanisms to Log Everything

As an example:

• For Walk-In enquiry you may use:    Computer prospecting system, Salespeople Activity sheets, Showroom Visitor’s Book
• For Phone-In enquiry you may use:     Receptionist tracking (and strategic placement of calls), Computer prospecting system, Salespeople Activity sheet, One of the Several Excellent Phone Training Systems on the market
• For e-mail  enquiry you may use:    Computer prospecting system, Automated mail tracking, Salespeople Activity sheets

5. Management must avoid using tracking to ‘punish.’

If salespeople are punished for their tracking figures, especially early on, they are more likely to manipulate the figures to avoid further punishment.  The focus of feedback should be to acknowledge what’s being done right and to improve what’s not yet being done right.

6. Telephone Enquiry must be verified the same day

Leaving Sales Managers’ verification 24, or up to 48 hours mean salespeople have too much time to forget, to dilute accountability, or to recall inaccurately. Even worse, urgent customers can be neglected and they buy elsewhere.

If we make the salespeople accountable ASAP after each contact for what they did with that contact, we improve our chances of getting accurate information.

7. Many salespeople do more of what’s inspected, not what’s expected

If reception puts through an e-mail to the relevant manager saying that a phone enquiry has just been put through, the manager can track it earlier and more effectively.

Then salespeople know that they have to provide their Sales manager with a report on the phone call within five minutes of finishing the call.  The Sales Manager knows if they do this or not because he’s been notified of the enquiry.  When the average dealership spends more than $600 to generate one enquiry, no salesperson should be allowed to judge whether or not someone is a ‘genuine buyer’.

Every customer who has done your business the courtesy of contacting you deserves the courtesy of being treated as a serious customer until they prove themselves to be otherwise.

]]> https://seanmorahan.org/training/principles-for-successful-sales-tracking/feed/ 1 https://seanmorahan.org/training/the-best-place-to-learn-to-swim-is-in-the-water/ https://seanmorahan.org/training/the-best-place-to-learn-to-swim-is-in-the-water/#comments Wed, 12 Mar 2014 16:09:28 +0000 http://seanmorahan.org/?p=130

I am often asked by clients for advice about the best place to conduct training.

My advice varies depending on the client’s individual circumstances but one of the most reliable guidelines I follow on recommending training venues is that ‘the best place to learn to swim is in the water’.

Learning to Swim

Imagine you are teaching people to swim.  You can teach them all of the theory and all of the techniques and motions of swimming, but until they get in the water, that learning is useless and in some cases detrimental to real learning relative to the desired outcome (an ability to swim).  I recall my own early swimming lessons as a child.  The swimming class we were in spent the first two weekly lessons practising stroke and head position standing next to the pool.  In the third lesson, the teacher was replaced by a new teacher who started us back at square one.  So by the time I got in the water, I had had almost a month of ‘learning to swim’ in the air.  The comfort I had learned to feel mimicking swimming movements in air felt completely unnatural in the water and I swallowed a lot of water and was panicked by the experience.  Several of my friends in the class had a similar experience and we were put off swimming for years.  When I resumed swimming lessons at 11 years of age, I had a great teacher who got me straight into the pool every lesson and got me feeling comfortable in the environment where my learning had to be translated into action.  Yes, we still practised, discussed and trialled techniques standing next to the pool, but most of each lesson was spent in the pool.

So What About Sales Teams?

So when it comes to training sales teams, the best place to train them (in most circumstances) is on the sales floor.

Training at a remote location usually involves a different (often unfamiliar) environment, sometimes different dress requirements, different training participants .  Yes, salespeople can have enjoyable learning experiences away from their sales floor, but you have added a significant step between their learning of skills and their use of those skills in their day-to-day role.

Some Advantages of On-Site Training Include:

• Learning new skills in on-the-sales-floor training means that the salespeople are more likely to raise, and have answered, their ‘real-world’ objections to aspects of the training.
• There are significantly fewer steps to processing, adapting and implementing sales techniques from training to the floor when the training is conducted on the floor.
• The salespeople are conditioned by their environment, so having the training on the floor helps ‘condition’ the new sales behaviours.
• It also ‘conditions’ salespeople that the sales floor is a learning environment, so they may learn more from their customer interactions on the sales floor.

Some Disadvantages of Off-Site Training Include:

• The extra time and cost involved in transporting sales teams to the training venue.
• Extra steps and work required by sales teams to adapt and utilise the new knowledge and/or behaviours to the sales floor.
• Some unscrupulous trainers may exploit some dealers’ beliefs that salespeople going away and coming back with any difference must necessarily mean an improvement.
• Training courses of more than a day off-site often induce idiotic behaviour in some salespeople (excessive alcohol, late nights, dangerous driving, showing off, etc.)

Naturally, Planning is Required

Of course, training has to be conducted at times when the sales floor is not full of customers, or an area of the sales floor may be cordoned off for training.  training may make use of a nearby office for group discussions and other exercises, but this should be done with the focus on getting back on the sales floor immediately to practise the skills learned, before trying them with a real customer.

Don’t Throw Them in the Deep End!

I am not advocating a policy of sink or swim.  Lazy and stupid sales managers waiting for salespeople to make a mistake and then criticise them is not true ‘on-the-floor’ training.  It’s not even training, although I have encountered many sales managers who believe their ‘seagull management’ approach is sales training.  It’s not.

Just like children learning to swim, salespeople should be carefully monitored and encouraged, and training should be flexible to address their particular needs.

Occasionally there is merit, or logistic necessity for training to be held off-site, but I have consistently found that sales training conducted on the sales floor gets the best and fastest results.

Road to a Sale is a procedural guide for helping a client to buy a car.  Different versions of Road to a Sale have been around for decades and there have been an extraordinary number of different versions of Road to a Sale.  Some manufacturers and dealerships have their own versions of Road to a Sale.

In its simplest form, Road to a Sale may be condensed into four steps:

1. Opening ( meeting and greeting )
2. Needs analysis ( establishing the client’s needs )
3. Capability Demonstration ( showing that your product meets the client’s needs ) and…
4. Securing Agreement ( client agrees to proceed )

Opening covers meeting your clients in a professional and courteous way.

Needs analysis involves finding out what the customers needs are.  This may involve uncovering needs that the client isn’t necessarily aware of beforehand.

Capability Demonstration may involve a presentation and/or demonstration ( test drive ), as well as answering the client’s final questions to the client’s satisfaction.

Securing Agreement involves finalising the paperwork and financials to initiate supply of your product to the client.

Why Auto Pty Ltd’s Road to a Sale?

There are some fundamentals of customer service that are self-evident and are rightly common to all versions of Road to a Sale.  However we tailor Road to a Sale training to our clients’ needs, and their clients’ needs.

Furthermore, our Road to a Sale training focuses on two major areas that maximise sales success.  These two areas are ignored or minimised in all the other versions of Road to a Sale that we have seen, and the lack of them often caused salespeople and their managers incredible frustrations in trying to implement the rest of the Road to a Sale.

We design and deliver Road to a Sale training backed by decades of personal experience in sales and management, including implementing two versions of ‘Road to a Sale’ at Mercedes-Benz.  Typically, most of the ‘common’ Road to a Sale knowledge is only about 50% of our course content.  The majority is in specifically addressing client needs, and these two new topics which have had great impact with the people we’ve trained.

Difference 1: Customer Needs Techniques

Yes, most ‘Roads to a Sale’ give you some ideas on ‘Qualifying’ a customer, but few give it the importance it deserves.  Even fewer give you the background understanding and specific techniques to make this as effective as it should be.

As we acknowledge in our ‘Road to a Sale’, the greatest motivation that a customer has to do anything, including buy a car from us, is their needs.  If we do not accurately determine their needs, the remainder of our ‘Road to a Sale’ may be wasted, costly, or at least unnecessary hard work.

One of the flaws we’ve found with other ‘Roads to a Sale’ is classifying customer ‘needs’ and ‘wants’.  We will show you why this actually sabotages your success in determining what’s important to your customer.

We show you some techniques and give you some exact questions to establish and develop your customer’s needs more effectively.

Difference 2: Credibility

We provide specific ideas on how to establish and enhance your credibility with your clients, how to reduce their fear, and how to earn the customer’s trust now and in the future.

Perhaps unfairly, most salespeople are at least perceived to lack credibility before the customer even meets them.  Sometimes this lack of perceived credibility is heightened by the client receiving conflicting information from various sources about the same vehicle.  This only serves to confuse your client.  Confused clients tend not to take action ( Does “I need to go home and think about it ” sound familiar? ).  We’ll show you how to keep your customer from being dazed and confused, so that they can act confidently.

To find out more about Road to a Sale training, contact us.

In recent discussions with colleagues, we have talked about the importance of effective product knowledge in providing good customer service.

One example I gave was a concierge in a hotel, who may be extremely polite, considerate, enthusiastic and eager to help. However if he/she doesn’t know the hotel and its facilities, doesn’t know the local area, doesn’t know the right restaurants to recommend based on guests’ needs, doesn’t know what shows and movies are playing in town, then his/her ability to deliver customer service is extremely limited.

I’ve read on other motor industry websites that several manufacturers are engaging concierge trainers to train their salespeople in customer service. This is a great step in improving customer service skills as long as the salespeople have the product knowledge and associated skills to match.

An enthusiastically helpful service person or salesperson who doesn’t know his/her ‘product’ can be an infuriating waste of time for a customer.

The BLT with Gluten-Free Bread

My partner is coeliac. Like other coeliacs, her immune system reacts abnormally to gluten (a protein found in wheat, rye, barley and oats). So eating normal bread (which contains gluten) makes her sick for several days.

Having breakfast with friends in a cafe recently that had several gluten-free (GF) options on the menu, including gluten-free bread, my partner ordered the BLT with the Gluten Free bread.  Fifteen minutes later, the waitress brought out a BLT (made with normal bread) and a side order of Gluten-Free bread.  The service was prompt and friendly but the waitress (and, it seems, the chef) had no understanding of why they had gluten-free items on the menu and why customers would need gluten-free food.  Naturally , the BLT was sent back and the ignorant waitress seemed a bit put out.

My partner had to wait for a new sandwich to be made (correctly) and got the right sandwich, fifteen minutes after everyone else got their breakfast orders.

So the end result was a below-average customer service experience.

A Motor Industry Example of Poor Product Knowledge = Poor Customer Service

Relating this ignorant customer service experience to the motor industry, I recall the story of the buyer of a brand new 4WD, printed in an Australian motoring publication a few years ago.  The new 4WD buyer had recently upgraded his old four-wheel drive to a brand new model.  He seemed to assume, as did his salesperson, that he was already familiar with the brand and the model so little time was ‘wasted’ on product knowledge and a ‘deal’ was done.

What both of them missed was the fact that the very old model 4WD that the customer was trading in was old enough to not have Anti-lock Braking System (ABS).

Naturally, the new car did have ABS but the customer wasn’t aware of what it did (and didn’t) do and the salesperson simply supplied a car for a price.

On his first weekend drive in his new 4WD, the customer was driving along a gravel road. As he approached a bend in the road, he braked heavily. The ABS activated, but did not slow his vehicle as quickly as he’d expected with his old 4WD and he ploughed into a tree. He blamed the ABS and the vehicle for his misfortune.  His blame would be better placed with the salesperson.

I recall reading a survey of Australian motorists years ago and, among other things, it revealed that over 60% of the survey respondents who drive cars with ABS had no idea what ABS did. Around that time I was training a large group of salespeople with a prominent prestige brand, so we started training one morning with a product knowledge quiz including a multiple-choice question on the function of ABS.

Almost 90% of salespeople gave the wrong answer on the function of ABS!

We quickly amended subsequent training to focus more on this and other important product information.

Product Knowledge Must Solve a Customer’s Problem

In his book SPIN Selling, from a comprehensive study of 35,000 sales calls, Neil Rackham shows how effective product knowledge is in sales, as well as the most effective way to provide product knowledge to a customer.

Furthermore, Rackham identifies a vital focus of customer service: What customer problems does it solve? If it doesn’t solve a customer’s problem, your product and your product knowledge are of little value.