Buying Process- How BHPH is Different than Retail

“Approach each customer with the idea of helping him or her solve a problem or achieve a goal, not of selling a product or service.” – Brian Tracy

“If your only tool is a hammer then every problem looks like a nail.” -- Abraham Maslow

Hey, this is Jay Rose from Total Dealer Training. If you want to live your lifestyle, guaranteed, you're in the right place. We're going to talk about in this post, the buying process, you might call it selling process. I call it the “Customer Purchase Process”. When a customer wants to purchase your product, it's pretty simple. They're either going to do it because they like your product. If they're in your showroom or your branch location, they already have enough interest in your product to be there or to call you. All you can do at this point is either guide them through their purchase process or screw it up which would then turn your buyer into a shopper. So either way, the important thing is when it talk about important differences between Buy Here Pay Here & Retail along with Older Training techniques and TDT proven better techniques that will increase your profits and customer success.

The purchase process & underwriting process from Buy Here Pay Here to Retail is completely different. Now, what do I mean by retail? Retail is a new car franchise or a retail used car store, basically, unless you're collecting payments from customers and you are doing outside financing, you are a retail dealer Now you may do subprime and maybe most of your businesses are prime. I'll cover that. That's kind of in the middle. The difference between a retail store, a true retail, where you have a highly competitive pricing model and you have very competitive interest rates and financing options with longer terms. That's usually available through banks and credit unions and some higher end sub-prime lenders, the middle ground is where it's subprime, which is basically still competitor pricing. Not because the customer demands it, but because the banks are squeezing that loan to value ratio, you would think you started off with a $3,500 deal and they line five your deal so you end up with an $1,800 deal. Now the net results, the same as a retail deal, but instead of the customer demanding it, the banks have created that. The squeeze in the lower price along with the interest rates being somewhere between maybe 8% to 19%. Sub-prime is in the middle but that is not Buy Here, Pay Here (BHPH). BHPH is when the customers can't get approved anywhere else, you have a state maximum Interest Rate you can charge a customer because of their higher risk, whether that's 21% or 24%. It's a flat rate & not negotiable. BHPH pricing is like restaurant “buffet” pricing vs a fast food restaurant pricing. In order to be a financially stable, you need to have a markup, which is at least $1500 or maybe even higher above Kelly Blue Book retail. This is why if you are a BHPH dealer, you should not spend money Advertising Price. You should be advertising your BHPH program benefits and get customer to call you so you can explain. This is why you never want to market or advertise price. But anyway, so the focus is that BHPH vs Retail is completely different. We have two different training programs in Total Dealer Training. We have a custom Retail training track and we have a custom Buy Here Pay Here training program, because the process that is needed is as opposite as English and Spanish. If you want to get the most custom dealer training available, you need to understand what's different between BHPH & Retail. Number one, there are three major steps and the names of those steps are similar, but the order is different with Retail vs BHPH. Your only goal with a Retail customer after you greet them is to land the customer on the car (vehicle selection). Once you use effective questions, you get down to a certain vehicle model or trim level. Then your job is to take a test drive, getting them to fall in love with the car, love the car enough to buy it today. Step two is “presenting financial terms”. You go inside, you get the financial terms, hopefully from the manager and you present the financial terms. Maybe it's an A/B payment option, finance payment option or an option of a lease purchase. Step three is the “approval process”. Whether it's your manager or finance manager, a business manager, whatever you call them, get the customer approved and you get about an 85%-90% chance of getting that customer approved under the traditional three-step process.

Now with Buy Here, Pay Here also has three steps but they are backwards to Retail, if not something's wrong and you're not getting the results that you deserve. The first step should be after the greeting. The customer should already be set up properly. When you set the appointment and BDC is they come in for the approval to save time and money. We have climate control and beverages inside. Get the customer from outside, bring them inside, get the approval. Once you have the approval, know their affordability and what basic vehicle model they need, whether it's a car, sedan, SUV, hatchback, crossover, or truck. It's not about a specific vehicle color equipment like in retail, where there isn't a used car factory to go build one. Your Finance Specialist job is to figure out of your 20, 40 or 60 vehicles you have available out front. Not ones that not anything that's coming in from recon is to show them the car, bring the car around, do the walk around on the car, based on the program, not on features, advantages, and benefits. This is completely different and backwards than Retail.

A BHPH customer needs to understand that their vehicle that we are presenting is good enough to get them back and forth to work. We won't present any vehicle to a customer that they couldn't afford. If they ask about financial terms, just say, “we're going to have all that ready”. That's being sent by corporate. We'll let you know, as soon as you get back from the test drive. The important thing is to get the approval. Your manager should be picking out one to two cars that fit their affordability budget. After you verified their paperwork on the approval, then step two is to test drive a vehicle or vehicle selection. Hopefully it's the management selecting it, and then test drive. Step three is to present the financial terms. BHPH process needs to have the approval first, vehicle selection & test drive second and presenting the financial terms third.

To review, the BHPH & Retail purchase processes are different. The old-school way of dragging a customer through a 10 or 12 step “road to the sale” process, it's completely different now. All of our TDT training is based on human behavior, working with customers, focusing on the relationship. Regardless of which step you do first, second or third, it's getting the customer to like you enough to listen to you, to build value in your program, then believe you so you can deliver them today. The dealers I'm working with, they average 70 to 80% closing ratio with the TDT techniques. That's tracking every single person that comes in because we do everything else the right way. If you want those type of results, definitely give us a call below. If you liked this post, subscribe, share it with your friends and other people in the industry, or give us a call. I look forward to working with you and your team.