Trust is at the crux of any human interaction. Whether you’re navigating the aisles at the grocery store, having a conversation with your significant other, or interacting with your boss at work, trust plays a critical role in how we approach each and every aspect of our life. Seemingly, there is no trust in a car dealership (not between the customer and the salesperson, and not even between the salesperson and the sales manager). For decades now, car salespeople have constantly gone to “talk my manager” for permission to negotiate during the sales process.
This tactic, paired with countless other dealer antics is very frustrating for customers. If you’re unfamiliar with your salesperson saying “let me go check with my manager,” you’re lucky! If you’re not, it means you’ve certainly spent countless hours at a dealership before being frustrated and disappointed that the process is so drawn out.
Today I wanted to provide some insight into why salespeople have to go talk to their managers to ask them questions when negotiating with a customer, and what really happens behind the scenes. If you prefer to watch instead, consider clicking on the video above.
It starts with trust
It’s important to recognize that car dealerships have been operating in a similar manner for nearly one hundred years. The manufacturer to dealership model has been in place since before you were born, and the tactics and strategies dealers deploy to maximize profits are ingrained in dealership culture.
Traditional dealership culture is anti-consumer — that is to say most dealerships operate in a way that isn’t transparent, friendly, or buyer oriented. Dealers are tasked with one primary goal: maximize profits, and in that quest, a lot of antiquated practices have become the reality of the car buying process.
The way dealerships are structured from a staff perspective is worth noting. There is an owner (either a mom and pop owner, or a big corporation), and then below them are the staff. There is a General Manager, a New Car Sales Manager, and a Used Car Sales Manager, and below them are the salespeople.
The structure may be different depending on each organization, but generally speaking, this is the typical formation of a dealership’s sales staff.
The New Car Sales Manager is responsible for (and their pay is tied to) how much gross profit the dealership makes in any given month off of new car sales. That means that the managers goal is to work with their salespeople to get the most profit out of every new car deal.
Now that you know that, it should be clear how the “let me go talk to my manager” tactic came to be. Managers don’t trust their salespeople to maximize profits. Instead, they fear that salespeople will jump right to the bottom line number right after shaking hands (or I guess elbow bumping) their prospective customer.
Most sales managers operate out of fear. Their compensation is directly tied to how much gross profit the dealership generates on any given month, and the idea of giving up “control” to salespeople to be able to make their own independent decisions during the negotiation process is a foreign concept to them. Instead, sales managers typically try to retain as much control over the process as possible, and that’s why you see salespeople frequently doting to the sales managers office.
Most customers prefer to deal directly with a decision maker
This control dynamic is ironic, however. Car buyers don’t want to be dragged into some strange power struggle between a salesperson and a sales manager. Instead, they simply want to deal with the actual decision maker from the start.
This makes sense considering most buyers research their purchase for 14 hours or more. To then be stuck at a dealership negotiating with a salesperson who really can’t make a final decision, only to drag on the process even more … It’s no wonder that buying a car can be a tiring event.
The construct of “let me go ask my manager” also allows sales managers to mitigate their fear of becoming irrelevant. As many car dealerships pivot towards one price selling, sales managers fear that they won’t be able to retain their roles within the dealership.
Car salespeople are trained “whoever has control wins”
Everything in life starts with trust, but in the car dealership it also starts with control. Antiquated training has led to salespeople and sales management staff being reliant on the concept of “whoever has control wins.” This “us” versus “them” mentality is not pleasant for anyone involved, but as a car buyer it is important you understand just how deeply it is rooted within the dealership.
- Salespeople don’t want to give up control to the customer
- The sales manager doesn’t want to give up control to the salesperson
- The finance manager doesn’t want to give up control to the sales manager
- The owner doesn’t want to give up control to … anyone!
As you can see, trust is lacking across the board, and when that’s the case, getting anything done at a dealership comes to a standstill.
The sales manager is trying to think two or three steps ahead to try and get the deal done
So what really happens when the salesperson goes to talk to the sales manager? The sales manager quizzes the salesperson to better understand how likely the customer is to make their purchase today.
If it’s likely they can close the deal today, the sales manager will work the salesperson to retain as much margin in the deal as possible. If the deal feels shaky, the sales manager might coach the salesperson to negotiate a slightly lower price to see if they can move the needle.
At the end of the day in the sales manager’s office the word they are most concerned about is “now”. “How likely are they to make the deal now?” Everything is about getting the deal done today, and it’s not only the sales managers responsibility to coach the salesperson to get the deal done now, but also with the most gross profit possible.
So there you have it, that’s what really happens when the salesperson goes to “talk to the manager.” Is it frustrating and annoying when it happens? Absolutely. Do you now understand why it happens? I hope so. Patterns of behavior that have been in place for decades will take time to erode. Let’s hope that this one goes away in the not too distant future.