Some years ago when I worked for an insurance company, my boss Frank Lowney and I were engaged in a rather heated discussion over some aspect of a product that we were developing for a dealer. He had his opinion and I had mine. We were failing to communicate. Then out of the blue Frank tells me that “It can’t be an orange ‘cause a vest don’t have sleeves.”
That comment stopped me in my tracks. Our conversation went in a totally different direction as I tried in vain to determine just what an orange had to do with being a vest. Or something like that.
Our original argument? Frank won that one easily. Once I was sidetracked, he made a couple of points and I conceded. I was a lay-down.
Later, Frank explained to me that I had fallen victim to the oldest trick in the sales handbook. He called it Focus Pocus. Not unlike a street magician working an unsuspecting audience, the trick, he explained, was all about misdirection. If a prospect asks you a question that you don’t want to answer, simply (and skillfully) change the subject. “Works every time,” he assured me.
I’ve sold cars, done F&I and worked in senior management positions in dealerships for some years prior to going to work for the insurance company. I considered myself well versed in the art and science of sales. I had read the books, listened to the tapes and attended the seminars. I was no rookie. Yet I had never heard of using slight of hand to sell something. After all, weren’t the buyers smarter than that? “You’d be surprised,” was Frank’s reply.
And I was.
I told Frank that I couldn’t imagine this trick working to sell cars. After all, what customer would buy when, after asking for the price of the car was told “This new car gets much better gas mileage than your old one”? In all my years working in dealerships I never met that guy. All of my customers wanted to know the price. Frank explained to me that while Focus Pocus usually won’t work in selling cars (customers have been conditioned to talk price), selling aftermarket programs to dealers was completely different. Dealers rarely talked price when it came to their F&I products. And when they did it was always in the context of what F&I products they were currently using. Dealers, he said, never asked the right question: What should these products cost.
Here’s where the Focus Pocus comes in.
Most vendor selling F&I products to dealers don’t want to talk about the price. Imagine how grosses would be in a dealership if the customer never asked price! So, unless the dealer asks, the vendors talk about something else. Usually, it’s how they can raise the dealerships PRU or increase sales penetrations in F&I. Making more money by selling more stuff is all well and good, if the product costs three times more than it should, the dealership would be taking four steps backwards to go one step forward. Focus Pocus.
And dealers usually buy this approach.
But sometimes dealers do ask price. It may be simply a conditioned response, not wanting to be a lay-down. That assessment would explain why these dealers so readily accept the next phase of the Focus Pocus strategy. I call this phase the “It’s In There” approach. When asked what the vendor’s products cost, the answer is “our pricing is all-inclusive. We provide training, development, administration, insurance, donuts, cool brochures, forms, yada yada yada. We’ll even answer the phones when you call.” If the dealer persists, the vendor will sometimes resort to the last ditch Focus Pocus tactic, the “Don’t Peek Behind the Curtin” phase whereby they will give the dealer a low-ball price and later tell him “You didn’t tell me that you wanted tires with your new car. I thought you wanted the best price. The best price doesn’t include tires…” The F&I aftermarket equivalent of that conversation has to do with ceding fees…that’s a newsletter topic for another day. Again, focus pocus.
Frank’s logic for sharing this information with me was to broaden my education. He wanted me to see what the other guys were doing in order to point out the flaw in their process. Basically, as I see it, the flaw is that dealers can read. And count. Sooner or later they will realize that what they were sold isn’t what they are paying for. Then the buyer’s remorse sets in.
The timing of this topic is not coincidental by the way. Just leafing through Automotive News or F&I Management and Technology outlines that this age old tactic is alive and well in selling F&I products to dealers. Need a company that can raise your VSC penetrations to 50% or get you to $1000 PRU? They’re in there. But at what cost? Is it a good deal or will the cost (what you pay) exceed the value (what you receive).
Remember, it’s not what you make but rather what you get to keep that’s important.
After all, “It can’t be a orange ‘cause a vest don’t have sleeves.” Focus Pocus.