Having trouble making money on lease deals? Perhaps it’s time to change your approach!
I remember when I was younger, my father use to get a new car every year. I never really thought too much about it until I became a Business Manager, can you imagine having to deliver to people constantly on a one year trade cycle? Well, in a way we do.
Leasing is back but we tend to have the same mind set as cash deals (a topic for another day), bill them and let’s move on. After all, they’re a short term cycle, always under warranty and the factory pays for their maintenance right? I don’t think so. Success starts with a plan so let’s create one for your leases.
- First things first – be realistic: The goal is to increase our overall PVR; however, selling a service contract and making $1000 is generally not going to happen on a lease. You need to rely on more products with less gross per item. Making $100 on Maintenance, $250 for Tire & Wheel and/or $100 for Key Replacement. The highest grossing business managers’ average $500-$750 per lease, the key being making something is better than taking the goose egg. Your lease PVR will affect your overall number dramatically.
- Plan your work, work your plan: People lease for many reasons including getting a new car sooner without having to worry about what the vehicle will be worth or a payoff, tax or business advantages and lower payments with more car. However, that does not mean these customers are withoutexposure for expense during or at the end of their lease. So, where do the lease customer’s exposures lie? Paint damage, dents, dings, interior burns, tears, maintenance (even on a lease?), windshield repairs and curb damage on wheels.
Starting with a good interview and open-ended questions is the same on a lease as it is on a purchase. If you’re not sure what’s important to a customer, how can you recommend any products? People are still going to maintain their vehicle during a lease, they are going to have to change the oil and rotate the tires. They will still want the vehicle to look good while they’re driving it, and they won’t want to have any surprise at the end when they turn in the vehicle. The goal is to expose their problems and then solve their problems.
- Use a Menu: A lease menu needs to employ another approach to reach the different mind-set of a lease customer. A great lease menu speaks directly to lessees varying situations. Additionally, using a paper or electronic menu allows another sense (sight) to be activated during your presentation of your customer’s potential exposure during the term of their lease and at lease end. Although not intended, the menu is often used for a sales pitch. Instead, think of it as a visual tool for communicating your message and briefly explain the features and benefits of each available item, then ask the customer to make a choice. This is the equivalent to starting a list price. Get creative with the structure of your menu provided.
To take advantage of your lease opportunities and increase your overall PVR, first, set realistic goals for improving your position and write them down. Second, a good plan today is better than a perfect plan next week. Finally, customers will not buy 100% of the products you don’t present.
By Jim Devitt