Editor’s note: This is the third and final blog in a series about dealing with customers’ objections to price. In this installment, Steve Lemco explains how offering financing will increase a customer’s likelihood to buy.
Customer John: “So, Steve how much is it?”
Salesman Steve: “John, the price is only $15,995, and that’s a lot of bike for the money. The best part, John, is you don’t have to pay for it … well, not all at once anyways. John, we have some awesome financing and can really make it easy and affordable to take home. Were you planning on financing the bike?”
John: “Yes, I am. I was planning on putting $2,000 down. What would my payment be?”
Steve: “John, one of the reasons I said we have awesome financing is that we work with many lenders. We quite honestly could get you over 100 different payments for the same bike, but the best payment is the one that works for you. John, what payment would fit your budget? Some people like to pay off the bike early and get payments around $600, is that what you’re thinking?”
John: “No Steve, that would be way too high.”
Steve: “No problem, John. What payment would work for you? $500? $450? $425?”
John: “Gee Steve, I was hoping to get a payment around $300. Do you think that is possible?”
Steve: “I sure do, John; we’re definitely in the ballpark. I’ll tell you what, let’s go sit down, and I will get a little bit of information and then I can get you an exact payment quote. Say John, where is the first place you are going to ride your new bike?”
For most customers, price is not the main issue. You could sell many people a bike for $1 million if you had a payment of $10 a month. Asking the customer what payment is affordable is the key to switching from the higher price they are not paying to the smaller affordable price they are going to pay. I mean, really, how far apart can you be on a payment? Once you find a payment the customer can afford, you are likely going to close the sale.
When the customer asks the price, this is the best time to answer with it and then switch the conversation to financing. If the customer gives you a payment that works, you will find that most of the time price is no longer the issue, and your average gross profit will go up.
On average, 80 percent of customers finance their purchases. If the payment is $300 per month, then it only costs $10 a day to buy the bike of their dreams. Most people sell or trade their bike within three years and will get around 70 percent of their purchase price back in the form of equity. That would mean to live the dream would cost them about $3 a day. These numbers are easy to understand and are also the truth. The secret is to not keep it a secret and share the information with every customer.
To be able to talk about the monthly and daily price of a bike is greatly increased by the Step 2 relationship you developed before price was brought up. Probing is such a big part of the selling process and so is switching from price to finance.
Steve Lemco is the youngest brother of the late Ed Lemco and has been doing sales training and hiring for motorcycle dealers since 1983. Steve has trained in every state in the U.S., as well as England, France, Australia and New Zealand. Steve incorporates motivational boards and games along with his training and hiring because he believes the best way to get the job done is to make it fun.