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CAR MARKETERS TRY THE SOFT-SELL APPROACH They are steering away from high-pressure tactics and giving customers what they want: wider choice and more information.
(FORTUNE Magazine) – CARMAKERS and dealers in the U.S. are scrambling for better ways to sell. The proliferation of makes from all over the world, the development of new car technologies, and car buyers' increasing sophistication have led to more comparative shopping, less nameplate loyalty, and some of the hottest competition in years. Selling better is dealers' top priority as U.S. car sales fall despite the drop in oil prices; in March, sales dipped 7.5% from a year earlier. The principal new rule of the game: hard sell is out. Arm- twisting salesmen and flashy TV commercials no longer seem to do the trick; rebates and superlow financing work only for a short while. The new buzzword is soft sell. Customers want more information and less hype. Dealers are trying to create settings in which customers will feel free to ask a salesman questions and may even believe the answers. Among the new developments: AUTO CENTERS. Stronger dealers are buying out weaker ones at an accelerating rate, sometimes accumulating ten or more franchises under one roof. And dealers are banding together to form giant auto parks where buyers can browse among nameplates much the way shoppers check out designer clothes at department stores. Martin Swig consolidated 13 lines (including Chrysler, Toyota, and Rolls-Royce) at his San Francisco Autocenter in 1983 and says he has since doubled annual sales volume to 6,000 cars. One reason for the jump, he says: salesmen may not accost customers in a pedestrian area known as the demilitarized zone. SATELLITE SHOWROOMS. Many dealers, sometimes with the help of carmakers, have been experimenting with satellite showrooms in shopping malls. Chevrolet just opened two, one in Moline, Illinois, and another in Appleton, Wisconsin. The mini-showrooms, which display a handful of cars, are supposed to attract casual shoppers, especially young and female ones, to new cars before they decide they need one. The technique is far from proven. Two of the first dealers to try it, both in Torrance, California, recently gave up because the mall's high rents ate up too much profit. ELECTRONIC SELLING. Buick's Electronic Product Information Center (EPIC) has an IBM AT computer with software by GM's EDS subsidiary. Installed in 342 of Buick's 3,000 dealerships, EPIC compares Buick models and features with other makes and figures the costs of Buick cars under various financing options. It does not supply competitors' prices. The company has tried out EPIC kiosks in malls in Miami and Dallas and is deciding whether to expand into more shopping centers. Chevrolet is reaching computer users by offering product information on a ''Chevy Tech'' diskette. The company charges $3 for shipping and says it has sent out 13,000 diskettes since December. SELLING BY INVITATION. Invitational Promotions Inc., an independent marketing firm that arranges by-invitation-only car sales for credit union members, claims to have helped dealers sell more than 200,000 cars of various makes since it went into business ten years ago. Invitational Promotions requires dealers to tell prospects how much they paid for cars and to set a fixed profit, usually a couple of hundred dollars or so. ''We provide a no-haggle, no-hassle environment that is good for all three parties,'' says Robert Crystal, the company's president. ''The customer saves money, the credit unions make the loans, and the dealers sell a lot of cars.'' MORE MARKETING TO WOMEN. All car companies have been changing their pitch to women, who buy 40% of new cars, according to auto research firm J.D. Power & Associates. A women's marketing task force at Chevrolet sponsors car-care clinics for women as well as career conferences addressed by such notables as Barbara Walters and Joan Mondale. Ford has hired Lyn St. James, a professional race car driver, to conduct ladies-only car-buying and car-owning clinics. She explains what to look for when getting financing, how to talk to salesmen, and how to take care of a car. ''You don't have to get dirty,'' she says, ''but it helps to know what's where.'' She also gives Ford salesmen consciousness- raising seminars on how to treat women customers. Changing the antiquated hard-sell attitudes of the predominantly male sales force, say many auto executives, is the toughest nut to crack. No one has yet found a surer way to close a deal than using hungry salesmen working on commission. Some dealers are trying out salesmen on salaries, hiring younger salesmen, and adding saleswomen. Says San Francisco Autocenter owner Swig: ''We've changed the cage, but now we have to change the animals.'' Swig is thinking of trying some of the well-scrubbed kids who work at Disneyland. |
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