Back by popular demand, we have another great discussion with Sean Kelly – Managing Director, Vines Group.
In this the first episode of a two part interview, we discuss the rapid period of change in the motor trade, the impact of the economy and extended buying cycles.
Sean has many years of experience in the OEM and dealer network, and also gives us his views on used car values, selling EV’s and looking after your customer.
Some brilliant tips on the sales process in general and how to sell electric vehicles.
Here are the highlights:
{03:05} Rapid Change
{10:19} Customer Buying Cycle
{12:32} Demo Drive
{13:23} Dead Money
{27:30} ‘Range’ is Banned
About Symco Training:
Symco Training was founded in 2000 by Simon Bowkett and it was his belief that the business had to offer its clients something different. That difference was clear to Simon from his days in the dealership when he experienced many sales trainers who had all the answers, but were unable, unwilling or both to actually show the delegate how they could be implemented. It remains the ethos of the business today. You see, Symco only employ trainers that are committed to delivering not only in spiring and insightful training, but are equally as happy to demonstrate these skills and techniques with real customers in your own showroom. We believe in order for sales training to be effective and in Simon’s words ‘real world’, it needs to be tried and tested in the only place it matters the showroom floor. There is no room for theory when your goals are for your team to sell more cars, hours or parts and retain more profit. In dealerships around the world the focus applied by many of the sales executives is to try and sell a deal. Symco specialise in getting your teams to focus on selling themselves, the product and then supporting this with the deal.
To find out more visit www.symcotraining.co.uk
Welcome to the Selling and the Motor Trade Podcast, an association with Symco Training. This is the weekly podcast where we share best practice tips and ideas on how to sell more cars, improve your service department and generally put more profit into your dealership or dealer group. I'm your host, Simon Bowkett. As some of you probably already know me as Skippy, I will start by saying thank you for taking the time to listen to this podcast. Hi and welcome to another episode of Selling and the Motor Trade and today it's my pleasure to welcome back Sean Kelly. Now Sean Kelly was first on the show back right in between the very first lockdown I think it was, so it must be three years ago. The reason why Sean's here is we were doing a best of, we're coming up to 160 episodes of Selling and the Motor Trade and you have so much data and you can see that which episodes people really like, which ones people go back to, which ones rewind and listen to it again and maybe they're playing it in sales meetings and Sean's was one of the ones that really resonated with people. So we're doing the best of series and I said, listen, let's get Sean back on the podcast because so much has changed from when we first spoke to him. So Sean, welcome back, sir. Oh, thank you, Skippy. I've got to say, I'm not sure about that data. It might just be me, my friends and family listening to it 10 times each to bump the ratings up. But yeah, no, I'm welcome to come back and thanks for your invitation again. No problem. Alison, doesn't that seem like the world has changed from when we sat there last time and done this? After the very first podcast that we did, I mean, we got whole agency model is coming along. We've got EVs now, the price of them, what's happening there. And we've got Kazoo, the rise of Kazoo was still, I think it just had a valuation of $2 billion or something when we spoke last time. Now the valuation is significantly different. I mean, a pin dragon, whenever you listen to this, maybe sold by the time you listen to this. So there's so much we need to catch up on. But for people who don't know you and shame on you, go back and listen to the first episode that we did with Sean. Can you let people know a little bit about your background and how you ended up being the manager of Vines Motor Group? Yeah, sure. Well, just a kind of quick, positive history. I'm an accountant by trade, but it doesn't make me a bad person. I did five years for what was BMW GB now BMW UK as a regional manager. So I've got a bit of a manufacturer's experience and funnily enough, Skip 2023 is my 20th year on the motor retail side. So BMW, Mini Man and Boy, and you've just alluded to it there. I think since we last spoke three years ago, the amount and the pace of change, both in our industry and in the economy and the political landscape and everything is probably being faster than the prior 25 years that I've been involved in the motor industry. Yeah. I too, Sean. So many times you train these new people who were in the middle of COVID. I remember one guy in a BMW network and it was right in the middle of COVID times, or sorry, just past COVID times. And he was selling cars hand over 50 with Sheldon Pease. He had that lovely arrogance that I know because I had it myself with my selling cars. You can't teach me anything. I just said, when did you start the motor trade? Of course, bless him Sean. He'd only been selling used BMWs for 18 months. I thought, goodness me, he doesn't know what the real world is yet. He hasn't had to sell and I'm going to tell you what, it's changed now. And unfortunately that person's no longer in the industry because he never learned how to sell. He didn't have to sell. Yeah. And I think we've definitely experienced some of that. I mean, the first 18 months out of the first lockdown were a boom time for motor dealers, really. There was low supply and high demand. I'm never going to say the job is easy because you're always dealing with customers who've got their predilections and so on. But it was certainly an unusual set of circumstances in terms of selling used cars and new were almost impossible to get hold of. Probably in the last 18 months we've seen the rise of EVs and the ups and downs in terms of the values of those vehicles and obviously there's new technology to get your head around as well. And I think some of those employees who had little motor experience before COVID are really now having to work hard. And actually some of them haven't yet got the skills if you like to create deals rather than just accept orders. And I think we were in that lucky place that's now turned. So yeah. So true. You actually said at the time, you don't have to be a genius to sell a car at the moment, okay? And just after COVID. And a phrase that really resonated with me anyway, he said, some when the job's bad, it's always the market. That's the issue. When the job's good. It's always asked, that's great. It can't be both. Okay. And you said, yeah, sure. Keep drinking with the bars open. But I want to ask you a question, Sean, has last orders been shouted? I'm not sure about shouted, but the hand is on the bell to give it a ring, I think. And I think what we're seeing is we're still seeing, you know, a buoyant used car market prices are still up compared to where they were a couple of years ago. It's the external economic challenges that people are facing now, whether that's high interest rates, inflation, the general cost of living challenges or indeed people coming off fixed rate mortgages to a new high. I think people are still in the market. People still want to have an own and drive a car. It's just you need to give them a real reason to spend their money with you. They need to see value in the proposition that you're putting forward to them. And as I said, I think on the first podcast, for a customer, a good deal isn't a number. It's a feeling. Yeah. And it's about creating that feeling for customers and probably even more so today than it was 18 months, two years ago. It's all about how customers feel about the individual and the product. Yeah. People always buy people. I think they always will always have. It's going to happen there. What was it? 16 times interest rates went up in a row. Last time they actually put a halt onto them, but inflation is still going up. So next time interest rates going to go up. We know the effect that has on people with their fixed rate mortgages coming to the end. People on variable rate mortgages are probably still crying. I think with some of what's happened there. But what impact is that had on you as a motor dealer? I mean, used car stock. You're having to look at the funding of that. Are you going back to looking at stock and getting back to good 30, 60 days times there? What impact is that having on your business? Well, the interest rate burden is significant. I mean, in terms of total cost of this year versus last, it's double. I mean, after a good couple of years, what we've been in the fortunate position to do is to buy a lot of our cars per cash. So we're not necessarily borrowing the funds to then pay that interest cost, but nonetheless, we still charge a notional interest cost to the business. So that's gone up from a relatively sensible base to twice the amount this year. But the interest rate alone hits into every other area because if a supplier of yours is funding their stock that then is coming into your business, you're paying more for that in the first place. If companies are investing in transportation and the logistics of getting things into your business, those prices are going up. So everything kind of stacks back in line with that. And the interest rates, one measure, the Bank of England is a number, but everybody else's product is that plus a margin. So the rates are just getting higher and higher and higher. I think in the medium term, they're predicted to kind of drop slightly, but only back to about 4%. And so I'm both you and I are not fortunate enough to be under the age of 40. Well, I'm definitely not. You don't look it. You don't look it, whatever. So anyone that's had to borrow money who's under the age of 40 has had it at pretty much zero interest. So they're not used to this environment, even though the rates are still relatively low historically. And sometimes it's just about that realignment of customer understanding of actually this is normal. What you had for the prior 10 years was abnormal. But there's a definite challenge in the business. And what we're doing is trying to, again, focus back on total value of stock that we hold, how quickly we turn that in terms of pricing and activity. We're definitely changing our profile of used cars to be older and therefore cheaper and try and recognize that cost squeeze on consumers as well. Is that just because they're the vehicles you can get? You sold this new cars, so clearly the vehicle parks lower. So we've had to take on older cars. Or is that a choice to go down older cars to make it more affordable for consumers? It's kind of a bit of both really, isn't it? I mean, we know the lack of new car registrations for the last three years is impacting that one to three year car park. So those cars just don't exist. But the reality of life is I've still got the same number of spaces on the four core. We've still got the same number of sales consultants and stuff that I need to feed. So if I'm going to hold the right amount of stock, I need to look older and perhaps a bit wider in terms of the model range that we're stocking as well. And we've been fortunate to be able to do that so far. So we've held up pretty well in terms of overall stock position. But what you can see is where we were, let's say 18 months, two years ago, you'd buy a car, you'd kind of check it over, give it a wash, put it on the four core. It's selling a week and self screen price. That whole period is taking longer now. The decision process for consumers is getting longer again. And then when you flip that into new cars and especially electric vehicles, the period between initial inquiry to order is stretching out and we're seeing an average of 10, 11, 12 weeks now from an original inquiry on a new vehicle to a confirmed order. It's much longer than it's been for the last couple of years. What impact is that having on a salesperson on the floor and they are to the sales process they need to adopt? Do we have to get back into the three sales? We need to sell ourselves first, the product second and then the numbers? Is it not just the numbers first, number second, numbers third? Are you seeing that change or back to, can I say back to normality? Yeah, I think you can say normal and the normal for us, for you and me and the people who've been in the business for a while, that's the abnormal to the people that we've recruited in the last two or three years. So at the moment, there's a little bit of a disconnect and what I've seen over the last six months in my businesses, let's call them seasoned as opposed to old. Let's call them the seasoned. You have a way with what you do. The seasoned sales consultants are still hitting the mark, hitting their numbers, doing the do, all that sort of stuff and arguably the people that we brought in that were fresher and younger and required a bit more training and development, they're just starting to struggle to keep the pace up. Now, it's my job and the rest of the team here at Vines to make sure that they're trained and coached and developed and motivated and all that jazz to get them to where they need to be. But it's definitely old school selling. I hate expressions like that, but I can't stop myself because I don't know another way of describing it. It's all about qualification, qualification, qualification, find the right car, build rapport with the customer. The demo drives never been more important, especially with the technology in the cars. It's a mind-blowing experience now for some customers, especially if they haven't bought a new car for three or four years, the leap in technology is enormous in the vehicles. And then finally, a customer wants to have that good deal feeling and it's our job to create that in the first place. So, I'm not sure what we're doing at the moment is getting customers who are addicted, if that's the right word, to paying 500 a month for their car. Not realizing that interest rates have gone like this from when they change their car. So, new cars are gone straight up as well. But the use car is starting to come down. I don't believe use car prices come off a cliff like they did in 0809. I hope so. I'll get your views on that in a second, but I really hope they don't. But so many customers are addicted to paying 500 a month. And now we're saying it's easily going to be what? 800, 850, whatever it is. And it's good old fashioned talking about dead money. Mr. Covenant, this is the money you're going to have to spend on your car over the next 12 months. We've got this money in the industry. We call dead money. We have to talk about the roadside assistance, the fuel consumption savings, going from their current car to their hybrid and what they're going to save on that one there. That's the good old fashioned stuff that we need to get back into. In fact, Sean, it's back to prospecting. Speaking to the people in the service department, and we've got a whole trumps of people that have no idea what to say to someone in the service department because they haven't had to do what you and I see them. Was that the word you used for? Deasened, yeah. So that's what I'm feeling out there. We've got to get the guys back to fighting for the deal there. Yeah, that's it. And in a couple of recent podcasts, one of them you talked about using the term the easiest part of my job when it was talking about the numbers. And it is that really. If you do all of the rest of the process properly, the numbers are the easiest bit actually because you've qualified them correctly, got the right car, built the desire, and actually said, you can afford it. Here's how we make that work, Mr. Customer. So, you know, I think some of those podcast tips and tricks that you've put out are really true now, not that they weren't in the past, but for the past couple of years, we've probably got away without this without using it. And I think for me now, the critical thing is there are enough customers to buy every car that is coming new or used in our businesses. Whatever, whatever, make model franchise that you operate or whether you're an independent. It's just about looking after that customer inquiry on the day. And it's also about finding the next deal from the pool of customers that already know you, whether they're coming in for service or parts or body repair or whatever else it may be. There are absolutely enough people there to do any of the numbers that are required. And customers are now buying value, yes, but it's always about service. If you look after somebody, you've given the answers that they look for and present them with an opportunity, you've got half the battle. It still winds me off the clock when people say, I did a great job. I did this, that and the other, and I say, did you answer the business? Yes. Oh, come on. We've got to do that every single time. It's like your 300% rule, all the products, all the time to every customer, you know. It's simple stuff and we overcomplicate it. You know, this podcast is all about sharing tips and ideas to some more cars, some more service and prove the whole business. And one thing that we're noticing out there, we do these things school day, Simcheck, where it's going to sound like a mystery shop, but it's different. I'm a frustrated airline pilot, maybe. And in the airline industry, every six months, you'll go and jump in an airline as simulator to see how they can fly the plane and I'll put them on one engine and do all that sort of stuff. And I've got a few friends that go into it and they hate it. They winch a bitch about it all the time. But if they get it wrong, people die. If we get it wrong, we just don't sell a car. So what we do, Sean, is we say, right, come and sell us a car from start to finish. We video the process. Okay. And we review it with the person, but when the salesperson gets it wrong, we stop, we call a time out there and we say, hey, listen, did you try a close there? Did you answer the business? There's the two things that we see almost all the time. A salesperson thinks they've trial closed at the end of a demonstration drive. They think they have commitment and they often say things like, it's nice, isn't it? Should we go and look at the numbers? Yes. So so many times, they say, have you got commitment there? Yeah, we have. It's not until we play it back with their manager and their manager hears what happens. So managers, listen to this, sorry, I'm going into trainers mode. When your salespeople come into you and they want that deal stacked, don't say have you trial closed. Every single salesperson would say, yes, change the word into, hey, what trial closed question did you ask? And you'll be shocked. The other bit, Sean, you hit the nail head for me. I got a T.I. Are the salespeople never asked for the business? I promise you, they'll put the deal in front of us and they say, so what do you think? What are your thoughts? How's that sound? If you're lucky, but we're saying, what do you think? What's the last word you left the customer said is think. And what's the customer going to do? They're going to go and think about it. So it's so true about ask for the business there. It just doesn't happen. Sorry, that's not fair to say. It's one of the things that often needs work on. So, well, you can, I mean, you can improve your closing ratio overnight just by asking for the business. It's as simple as that. If you sell to one in three, you'll end up selling to one in two. If you just ask everybody every time, you know. And now there's a way of doing it. You don't want to kind of commoditize the brand or kind of rail road or customer into a decision they're not happy about. But that's where the skill of the sales manager and I think what, again, has been missing for the last couple of years is that one-on-one coaching and developing and the training of the execs, it's great if they do one of your programs or something else that's fine, but it's what's happening every day on the floor with that manager that's going to make that person more successful or otherwise. You know, I have used sales manager has to be a trainer. We turn the managers and trainers. We got to be interchangeable because your managers are trained the guys eight times a day where we'll be coming in once a month training. They have to know the words and tracks. They have to load the lips from the sales person to go and do that. Sure, I want to dig into something you said before. Most people listened to this podcast, but I said before, I don't believe that use car prices are going to come off a cliff and oh, eight, oh nine. I said, I'll get your views on that. I could see your head was shaking in agreement, but use car prices. It's not going to be like oh nine again. You're in the motor trade then when Range Rover sports were five, six grand a month in the book. Yeah, yeah, yeah. I can't foresee it, but again, I don't know what the seven numbers are for the lottery on Saturday either. But if you look at the macro economic setup for use cars in the UK, we've still got limited supply in that one to three year park. If you look at things like train strikes and kind of terrible public transport shenanigans that going on, people still want to have their own mobility, whether it's a power or a bike or a scooter or a bicycle, whatever it is. So there's going to be limited supply, still significant demand. And as long as again, we can kind of bring those two things together, then I don't see prices moving significantly. In fact, Simon, if you know, truth be told, I think the recent reductions in use car values and nothing to do with the market is to do with those bloody dealers. Because it's coming to the dark mornings, early nights, it's a bit cold and miserable. And the end of the year's coming and we got nowhere left to run. So all of a sudden, managers and people like me are saying, right, let's clear some of that stock. Let's create some gaps for the new year. We can go and buy at the end of the year, blah, blah, blah. I'm weird talking that market down by our actions in the business. I don't think that's about a lack of consumer demand. I don't think it's necessarily about consumers being more demanding of the deal on the day, either. And I think it's one of the things that's most frustrating about the motor trade, I think, is that we like to talk ourselves into a spiral rather than actually all holding our nerve and just kind of going with the flow of the ebbs and flows of the market. So I don't foresee used car prices moving significantly backwards anytime soon. And I think even just this Q4, 1% correction that they're kind of talking about, I think will bounce back it. We always get a dead cat bouncing January on use values anyway. That will come again, I'm convinced. And I think as long as the economic environment doesn't deteriorate, it looks like it's stable now for one of a better word. Then I think there's still plenty of demand for the use cars that we've got around us. Yeah, I would agree with everything you said there. One bit that I have my little caveat and I don't have the seven numbers either. It's the EV market. And I keep on on the EV side, but I think what's happening with this, we know that Richie has turned around and pushed EVs back to 2035. But I want to get your views from when you were working with the OEM because the OEM still have to sell what is it, 22% next year? The government's not taking that off. So how is that going to play out? Because we know that use vehicles, sorry, use electric vehicles, how getting a bit of a kicking at the moment. The customers, I think the government's told the customers don't worry about electric vehicle, we're not going to happen. I think that's the message I've sent. They've told all the manufacturers tough, you still need to do it. So the manufacturer has to produce these electric vehicles. Are they going to have to force the market? Are they going to have to? Are we going to see a situation where there's going to be huge finance deposit contributions, allowances, are there going to be zero percent offers on them? I mean, as we speak at the moment, last week, Tesla knocked another 3000 pounds of a Tesla 3. What's your view on the whole EV market? Yeah, well, I don't know what. I could talk for about three hours just on that alone. I mean, if we go back to a new car perspective, you're dead right, the ZV mandate next year, 22% of the manufacturers' registrations have got to be electric vehicles. Now for businesses like BMW, they're kind of selling at that rate now. So it shouldn't be too much extra strain. But if you're a Land Rover, for example, how many bevs have they got to sell to make their 22%. So it's different strokes for different folks. But what I think is happening in the EV market, there are already customer incentives of lower APRs and higher deposit contributions and that kind of thing. And the challenge at the moment is 80% of the BEV registrations in the UK are to either a company car driver or to a small business because of the tax benefits. So the retail share of that is actually quite small. And I think what will need to happen over the next year, two years is we need to find a way of convincing Mr. retail skeptic, if you like, to kind of make the EV plunge. At the same time, we'll have a proliferation of return electric vehicles from lease co-companies who've been buying them for the last two or three years. So you can definitely see a few interesting imbalances in play there because you talked about use EVs and pricing. Actually the market on them is stabilized now. We took an absolute bath in the end of first quarter and start of Q2. Was that a lot to Elon Musk with the 19% he did in the first quarter? Do you feel or not? Do you know what? Everything's connected for sure. So I've no doubt if your headline rate drops, then it does impact the used market. The thing is with any of those Tesla price reductions, it looks great on a bit of paper to a consumer to then go and present themselves at their business. But when you look at the monthly costs, exactly, the RV moves in the same direction. So actually there's no 90% of people on the new car are buying it on finance. So there's no benefit of those constant price reductions. All it does is create a bit more of a kerfuffle in the market and also in the consumers. Because if prices are constantly coming down, you're always waiting for the next one before you make your decision. And it's like where does it bottom out? So we've got a job of work to do there in both communicating to customers the values of EV and I don't just mean eco wise and CO2 and all that jazz. But actually the whole life cost of an EV versus an internal combustion car. How many miles do you do? So here's the thing for me Simon. So if you've got a driveway, not everybody does, but if you've got a driveway and can have a home charger, it is a no brainer to have an EV. You have a simple as that. It doesn't matter what car it is, but it should BMW and Audi, whatever. You stack up petrol versus EV. If you can charge at home, you're winning all day long and nobody is communicating that well enough to customers at the moment. Saus people, please listen to this. That's so, so true. Everyone's talking about range and where do I charge? There's not enough charges out on the road there. But honestly, how many people are charging them out on the road? If they're going, they're charging overnight. Overnight is the time to charge it. It's the cheapest time to do it. But that's not the message we need to be. I don't know if their manufacturers are getting that message out enough either. No, I think you're right. I mean, for me, you use the word range there, Simon. I've banned that because actually it creates that negative concern in a customer's mind. What we talk about is drive time. How long are you in the car every day? Oh, I drive 30 minutes a day each way to work. Great. Well, let me tell you, this EV can do two hours driving. So your quids in, you'll never need to go to a fuel station again. And it's just framing it in a way that gets people to buy into the whole proposition. Because it is a bit scary. We've all been early doors. We were all EV skeptics and stuff. I get that. But I'm just not sure either through the government or manufacturers or us as dealers were communicating in a way to a customer that really resonates with them. And we've got to do that because these cars are coming and they're coming quick and they're coming in bigger volumes every year for the next five years. This is something that people outside the industry would not realize. I still get the Facebook people saying, oh, no, EV. It's going down to dead end. Oh, no, no, no. I love my petrol car and we're going to go hydrogen. But the manufacturers are so far down that development route. They can't turn around. Even if they want to do short tomorrow, it's coming. It's coming. We're going to have to do it. Because from the only point of view, what is it? Seven years development cycle, something like that? Yeah, yeah. And so, funnily enough, only last week we were at the dealer launch for the new i5 Saloon fully electric or all the bells and whistles. I mean, the car drives fantastically. The product substance is great. The technology is fabulous. What we've got to do is get people to drive it, get people to see how good value it is. And that's the only thing that we need to do on every EV, whatever your brand or franchises or if you're a used EV specialist. I think part of the challenge for us is we've lost some of the skill personality. Whatever the right terminology is to have a conversation with a customer that's really engaging. I think we've fallen into the features dump or the technology dump. And we need to just rewind back, see what's important to a customer. And when they tell us, if we listen enough to them, when we're doing the presentation or the demo drive, we talk about the things that are their hot buttons. It's not hard this job, Simon, is it? No, it's not. And listen, if I could do it, Sean, I started washing cars, we'd live in there. If I could, anyone can do it. But Sean, we know that we have lots of trainers, listen to this podcast and trainers working for manufacturers. One thing I would say is I get there's so much technology on the modern car. Whenever I get sales people being to a manufacturer's training course, though, they're worth talking about the technology, technology, technology. And there is so much there. But don't forget the selling skills there. And it is that feature dump feature dump. Never ever forget the advantages and the benefit, the pain, the story to sell it. And that's what you did when you barred range anxiety, barred the word range. And just turn around and say, how long does it take you to get to work half an hour? You got two hours there. That is talking about the customer using it in the day and day. Because who just does a range? How many miles their trip is to work? No, I know I'm sitting in the car for 40 minutes. That's what they know there. And it's so manufacturer trainers, listen to this, get back to good old-fashioned selling skills. I think the manufacturers have gone away from that. And quite rightly, because there is so much technology that had to get into us there. I heard something in the day. I can't remember where it was. It was either a podcast or on the news or whatever, whatever. And they were talking about MP3 players when they first came out. There's one for the teenagers. And they were saying, how many gigs of this and bytes of this and that and the other one, they were trying to sell them. And it was turning people off because it was too complicated. Apple comes along and says, a thousand songs in your pocket. So you got it. You've got it. So it's, you know, the technology is great. But what does it do for me? Yes. And using language that's simple and easy to understand. That's the critical bit for me. That just leaves me to say that all details of this episode and other episodes on the selling in the Motor Trade can be found on our website simcotraining.co.uk. Go there to get a copy of our book, Words That Sell Cars. Go there to sign up to a free trial of our sales fitness online sales training program. The easiest way to get hold of me is Simon Bowkett, who linked in. Thank you.
