My 1989 Mercedes, a reliable companion for almost 190,000 miles, came to an abrupt end of service last week. "Drowsy" as my daughters called him for the "sleepy" transmission, could no longer go, no matter the incentive. What follows are highlights from accelerated version of the American ritual of buying a car, which, through the lens of my occupation, became a study in sales behavior based on sales commissions and incentive compensation.
With no car to get to work and many incentives expiring at month/quarter end - I had 5 hours to test drive cars and make a decision. Important note - I do not recommend this strategy! I did spend many hours ahead of time on the manufacturer's sites "building my car" and emailing to dealers for quotes.
I started this sprint at the dealership right in my town (brand names excluded to protect the innocent). I asked the saleswoman helping me whether she could match the price I received on the Internet from another dealer. Immediately, the manager jumped up from the next cube like a jack in the box and practically shouted at me that they would not do that. "If you buy from someone else- so be it." (Days later I did get an email offering to see what they could do) Clearly they had a profitability incentive commission, but not one for customer courtesy.
At another dealership, the salesman walked me out to the car, the wrong model, opened the driver door, let me sit down, then did not say another word, nothing about the car, what I was looking for, not one word - it was awkward - he was not motivated to sell me this car.
And of course at every dealer, there are those private discussions between the salesperson and the manager - I always wonder what they are talking about: "Ham and cheese today Frank?" "This fellow says he is buying a car today, so keep him here - stall!" I made it to 4 dealerships and test drove 5 cars.
At the dealer I bought from, the salesman stayed 2 hours past his normal schedule to wait for me to decide. I asked him not to, but as he explained to me - he was not going to get the commission if I came back and I bought the car from someone else. In fact they kept the dealership open late, the sales manager and the business manager stayed to process my order. I guess they were all motivated to make the sale. I kept apologizing : "Don't ever apologize for buying a car" they said. When I picked up the car, my salesman told me that I would be getting a customer satisfaction call from the manufacturer and to please rate the experience a 10, he said that if he averages below 9, it's the difference between $20 and $120 per customer or something like that.
So you can see how incentives might influence results. Read how a car dealer in Detroit is using car sales compensation to drive results in the eye of this economic storm.