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Wards Auto Tesla Salespeople Would Make Great Museum Curators

Wards Auto
Tesla Salespeople Would Make Great Museum Curators

July 2014

I ask Fran O'Hagan for a point of clarification after he says he would have been impressed if his consulting firm's study showed Tesla dealerships were consistent “regardless of whether I believe they're doing the right thing.”

Wait? Does that mean he might think it is wrong for Tesla to bypass the traditional franchised dealership system and instead run its own stores? A lot of state dealer associations think it's wrong. They cite various state franchise laws as they fight the legality of Tesla's factory-outlet setup.

But O'Hagan, president of Pied Piper Management which did an annual mystery-shopping analysis of dealership sales effectiveness by brand, says he wasn't weighing in on whether upstart Tesla should or shouldn't sell its electric cars through franchised dealers like other brands do.

“We're Switzerland,” he says, referring to the neutrality of that nation. “When I say I'd be impressed if Tesla dealerships were all doing the same thing, right or wrong, I'm referring to there being at least a consistency to the sales process.”

But there isn't, according to the latest Pied Piper Prospect Satisfaction Index. For the first time, it included 50 Tesla dealerships in states where the automaker is permitted to sell factory-direct. In other states, tough dealer-franchise laws prevent that.

Tesla dealership staffers on average did a couple of things right but enough wrong to finish dead last in the index ranking. Tesla scored 86. The industry average is 100. Mercedes-Benz topped the list with 110, followed by Infiniti (108), Lexus (105) and Cadillac, Hyundai, Smart and Toyota in a 4-way tie for fourth with 104.

Some individual Tesla salespeople made all the right moves, such as demonstrating product knowledge, engaging with customers, offering a test drive, giving compelling reasons to buy and pointing out features distinct from the competition.

But those showroom standouts were rarities. “We found huge variations with Tesla stores,” O'Hagan says. “There were examples of brilliant salespeople doing everything perfectly.”

And then there was everyone else, a legion of workers that hasn't mastered the fine art of car salesmanship.

Tesla scored low mainly because too many dealership staffers acted like museum curators, O'Hagan says. “They were friendly, knowledgeable and answered questions, but they didn't find out what is important to the buyer and they stopped short of asking for the sale.”

That's fine for conducting gallery tours at the Metropolitan Museum of Art. But the stuff there isn't for sale. Dealership cars are.

One mystery shopper's field report describes an encounter with a Tesla salesman:

“He didn't really ask any questions about me. The majority of the conversation was me asking him questions and trying to keep the conversation going while he provided answers. He didn't get into specifics or attempt to get me to buy a vehicle. He was just answering questions.”

Ironically, Tesla led all brands in following up with customers after their store visits. “That's great behavior, but if you stop short of selling the car in the first place, following up seems contradictory,” O'Hagan says.

The study spotlights other contrasts. For example, Lincoln dealership salespeople were among the least likely to approach a customer and say: “Can I help you?” On the other hand, sister-brand Ford salespeople were among the most likely to do that.

The question may seem like one of those innocuous little things humans say to each other to get the ball rolling, like asking how someone is doing.

But at a dealership, a seemingly harmless “Can I help you?” typically triggers the deadly response of “I'm just looking.”

An open-ended starter question is much better, O'Hagan says. “We measure it. Salespeople who don't say, ‘Can I help you?' are more successful. They might instead say, ‘I saw you pull up in a Ford F-350 dualie, do you tow?' That builds rapport. The answer to that is never ‘I'm just looking.'”

There's a right and wrong way to sell cars whether a brand runs its own stores or uses the franchise system, he says. “What we consider right is what the math says turns shoppers into buyers.”

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The Detroit Bureau Following the Pied Piper: Study Shows Which Dealers Best at Closing the Deal

The Detroit Bureau
Following the Pied Piper: Study Shows Which Dealers Best at Closing the Deal
Despite claims of doing things better, Tesla falls far short of rivals

July 2014

For many – perhaps most – motorists, buying a car is a process only slightly less painful than having a root canal. Yet some dealers do a markedly better job not only keeping potential customers satisfied but also making sure they close the deal. Who's doing the best job is the subject of a new study that puts Mercedes-Benz at the top of the list, and battery-car start-up Tesla way down at the bottom.
It's the first time Tesla has been included in the annual Pied Piper Prospect Satisfaction Index, and it raises serious questions about the California carmaker's claims to be doing things a better way with an approach that relies on factory-owned, rather than franchised, showrooms.

“Today, car salespersons have become a lot more helpful” than they were barely a decade ago, said Fran O'Hagan, the analyst behind the Pied Piper study. But he cautions that it takes more than just a friendly attitude and the ability to answer a customer's questions to close a deal while also keeping buyers happy.

“We're measuring how effectively a dealer turns a car shopper into a car buyer,” added O'Hagan.

The 2014 Pied Piper Satisfaction Index, or PPSI, looks in detail at the sales process, tracking how retailers and their sales staff follow what might be described as best practices. Do they greet a customer walking into the showroom? Do they outline specific and relevant features of a vehicle and compare it to the competition? Do they take the appropriate steps to close a sale rather than stand back as a potential buyer leaves the showroom?

By and large, the answer is yes at Mercedes-Benz stores, the German brand leading the PPSI as it has consistently over recent years – reflecting a concerted corporate effort to develop a best-practices approach to sales that O'Hagan says most Mercedes dealers now follow. Infiniti comes in a close second, followed by Lexus and, in a four-way tie, Cadillac, Hyundai, Smart and Toyota.
In general, there have been major – and generally positive – changes in the way dealers operate since O'Hagan launched the Pied Piper study in 2007. On the whole, it echoes the results of other studies that have found car shopping has become a bit less of a tedious chore. There's less of what O'Hagan calls the “Wild West” practices that created a layer of anxiety for shoppers.

But while today's salespeople tend to be more professional, some, he says, “fall into what I call the museum curator category. They answer your questions but they don't proactively help turn you into a car buyer.” Surprisingly, a majority of those working at Tesla showrooms “fell into that category,” O'Hagan's team of mystery shoppers discovered after visiting every single one of the maker's stores around the U.S. Where benchmark Mercedes scored 110 on the PPSI scale, with an industry-average score of 100, Tesla slumped to the bottom, at just 86.

Tesla salespeople, said O'Hagan, “are far less likely to give reasons to buy or offer a test drive or talk about financing options. They're much more likely to fall into the museum curator category. They're friendly and knowledgeable, but don't do anything proactively to turn a shopper into a Tesla owner.” The low score is all the more surprising considering the start-up maker's argument that it can do a better job by owning its own stores rather than going the traditional franchise route – a position that has run it afoul of dealer groups and franchise laws in a number of states.

While dealers are generally doing a better job working with customers on the showroom floor, the latest Pied Piper study did find the old Wild West mentality remains, ironically, when it comes to working with customers online. Among other things, dealers often tend to be slow to respond to email requests from customers, a delay that can send a potential buyer scurrying to another store. Lexus topped the industry in terms of Internet practices, said O'Hagan, though he quickly added that, “Even the top brands were only average at best.”

Asked why it matters to follow best-practice policies, O'Hagan said there is a direct correlation between those stores that top the PPSI chart and those at the bottom. The best dealers continuously outsell the poorer stores by 16%. For a manufacturer, that can translate into significant lost sales and market share and translate into higher incentives and advertising expenses.

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MERCEDES-BENZ DEALERS RANKED HIGHEST BY 2014 PIED PIPER PSI(R)

MERCEDES-BENZ DEALERS RANKED HIGHEST BY 2014 PIED PIPER PSI(R)

July 2014

MONTEREY, CALIFORNIA – July 7, 2014 – Mercedes-Benz dealerships ranked highest in the newly released 2014 Pied Piper Prospect Satisfaction Index(R) (PSI(R)) U.S. Auto Industry Benchmarking Study, which measured treatment of car-shoppers who visited 5,671 dealerships throughout the country. Study rankings by brand were determined by the patent-pending Pied Piper PSI process, which ties “mystery shopping” measurement and scoring to industry sales success. For the second consecutive year, Infiniti and Lexus dealerships, the luxury brands from Nissan and Toyota respectively, were ranked second and third.

Twenty-two of the thirty-four different auto brands led the industry in at least one PSI sales process category, while fifteen brands finished last in at least one category. Tesla dealerships, included in the study for the first time this year, led the industry in seven PSI sales process categories, such as involving the prospect with visual aids, and following-up after the visit. However, the Tesla dealerships also finished last in thirty-two categories, such as asking the prospect's name, offering a test ride, or mentioning the availability of financing options.

Brands showing the most improvement year-to-year were Scion, Mitsubishi, Mazda, Lincoln, Cadillac, Chrysler and Nissan. Brands with the greatest declines year-to-year were GMC, Jeep, Mercedes-Benz, Audi, Chevrolet, Infiniti and Ram. Three brands have been consistently ranked within the top 10 brands over the past five years: Mercedes-Benz, Lexus and Jaguar.

Performance varied substantially by brand within some categories. For example, salespeople are often taught to try to build rapport and ask open-ended questions instead of just saying, “Can I help you?” Lincoln, Chrysler, Honda, Volvo and Fiat salespeople were least likely to start a shopper's visit by saying, “Can I help you?” In contrast, the salespeople most likely to ask, “Can I help you?” worked for Ford, Mazda, Ram, Scion and Chevrolet dealerships. Another example is whether or not the salesperson suggested sitting down at a desk; a step often used to transition from talking about the product to talking about buying the product. Salespeople from, Nissan, Hyundai, Ford and Kia dealerships were most likely to suggest sitting down at a desk, while Tesla, Mitsubishi, Volkswagen, Land Rover and Audi salespeople were least likely to make the suggestion.

Industry average dealership performance was mixed when comparing 2014 with the previous year.

Salesperson behaviors more likely in 2014 than 2013 include the following:

• Gave compelling reason to buy from this dealership (now 50% of the time)
• Discussed features unique from the competition (now 59% of the time)
• Mentioned maintenance program and associated costs (now 58% of the time)

Salesperson behaviors less likely in 2014 than 2013 include the following:

• Offered a brochure (now 50% of the time)
• Asked why prospect considered brand (now 60% of the time)
• Involved prospect with visual aids (now 36% of the time)

“Great products are the key to strong sales,” said Fran O'Hagan, President and CEO of Pied Piper Management Company LLC. “But the only way to make the most of a product's sales potential is a capable sales team, following a consistent sales process.” Pied Piper has found that on average, when auto dealerships are ranked by their PSI score, dealerships in the top quarter sell 16% more vehicles than the dealerships in the bottom quarter.

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Powersports Business Mystery shopper title goes to Ducati dealers

Powersports Business
Mystery shopper title goes to Ducati dealers

May 2014

Ducati dealers took a big jump in the 2014 Pied Piper Prospect Satisfaction Index, up 7 points from 2013. The 114 score helped them surpass Harley-Davidson dealerships' score (111) and lead the industry for the first time since 2009.

The change, Pied Piper president Fran O'Hagan said, was due to a shift in how Ducati uses mystery shopping as a training tool. Ducati in 2013 chose a mystery shopping method similar to what Mercedes-Benz, the top PSI-scorer on the auto side, implemented about five years ago.

Mercedes said, ‘We're going to put money on the line to make mystery shopping worth your while. But we're not putting money on the line tied to scores; we're putting money on the line tied to you using this as a tool, that's all. But you have to use it, and we're going to make you sit down with your Mercedes reps once a quarter and review your mystery shop results with them and talk to them about how you're using the results to improve the way you sell.” O'Hagan explained.

“That is exactly what Ducati did. Ducati copied that approach and started at the tail end of 2013, and it's running today, so Ducati incentivizes the dealers to use mystery shopping. Ducati doesn't particularly pay attention to the scores; what they're paying attention to is that the dealers are actually using the results to improve the way they sell, and the Ducati reps are doing the same thing. The Ducati reps are talking to the dealers about what you are doing and what can you do to improve. There has been a huge improvement,” he added.

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Motorcycle & Powersport News Ducati Dealers Ranked Highest in 2014 Pied Piper Study

Motorcycle & Powersport News
Ducati Dealers Ranked Highest in 2014 Pied Piper Study

May 2014

Ducati dealerships returned to the top rank in the newly released 2014 Pied Piper Prospect Satisfaction Index(R) (PSI(R)) U.S. Motorcycle Industry Benchmarking Study. The last time Ducati dealerships were top-ranked was 2009. The study measured dealership treatment of motorcycle shoppers, with rankings by brand determined by the patent-pending Pied Piper PSI process, which ties “mystery shopping” measurement and scoring to industry sales success.

Harley-Davidson was ranked second, with a PSI score identical to the brand's 2013 score, which led the industry last year. Bombardier's Can-Am brand was included in the study for the first time, debuting with a third-place ranking. Industry-wide performance improved substantially from 2013 to 2014, with twelve of seventeen motorcycle brands achieving higher scores.

Either Ducati or Harley-Davidson dealerships led all other brands in one-half of the study's measured sales activities.

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Motorcycle.com Ducati Dealers Top 2014 Prospective Shopper Satisfaction Study

Motorcycle.com
Ducati Dealers Top 2014 Prospective Shopper Satisfaction Study

May 2014

Ducati dealerships were rated the best in the U.S. motorcycle industry at how well they deal with potential new customers. The Italian manufacturer earned the highest score out of 17 major brands in the 2014 Pied Piper Prospect Satisfaction Index, the firs time Ducati topped the annual Index since 2009.

The study was conducted by California-based Pied Piper Management Company which employed 1,885 anonymous “mystery shoppers” to visit different dealerships across the U.S. between July 2013 and April 2014. The “mystery shoppers” pretended to be regular customers and observed how dealerships fared in a number of customer-friendly categories such as offering test rides, asking customers for contact information, or for doing something as straightforward as asking a customer to buy a motorcycle.

Ducati and Harley-Davidson (which topped the 2013 PSI study) combined to earn the top scores in half of the different categories. Another ten brands scored the highest in other categories. The scores were added up to produce an overall index number.

Test rides remain an important category that is underutilized by dealerships. According to the study, dealerships mentioned either an immediate or future opportunity for test rides only 52% of the time. That's an improvement from the 36% rate recorded in the 2011 study, but still rather low considering the results. According to Pied Piper Management, dealerships that offer immediate test rides at least half of the time sell 44% more motorcycles than dealerships that don't.

Ducati, Can-Am, Harley-Davidson and BMW dealers were the best at doing this, mentioning test rides 60% of the time, and it's no surprise they fared well overall. Meanwhile dealers selling Moto Guzzi, KTM, Yamaha, Suzuki and Honda motorcycles mentioned test rides only 30% of the time.

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Dealernews Mystery shopper study: Dealers improve PSI scores over 2013

Dealernews
Mystery shopper study: Dealers improve PSI scores over 2013

May 2014

MONTEREY, Calif. - Ducati dealers ranked tops among mystery shoppers for the first time since 2009, according to the 2014 Pied Piper Prospect Satisfaction Index (PSI) U.S. Motorcycle Industry Benchmarking Study.

Industry-wide, dealers improved their prospect service scores "substantially" from 2013 to 2014, with 12 of 17 motorcycle brands achieving higher results than they did last year, researchers said. Dealer sales personnel mentioned the availability of test rides, asked for customer contact information and offered to write up a deal more than they did last year, the survey noted. But they still have work to do if they're going to achieve higher numbers, according to Pied Piper Management Co. LLC.

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Powersports Business Ducati dealers top PSI for the first time since 2009

Powersports Business
Ducati dealers top PSI for the first time since 2009

May 2014

Ducati dealerships returned to the top rank in the newly released 2014 Pied Piper Prospect Satisfaction Index (PSI) U.S. Motorcycle Industry Benchmarking Study. The last time Ducati dealerships were top-ranked was 2009. The study measured dealership treatment of motorcycle shoppers, with rankings by brand determined by the patent-pending Pied Piper PSI process, which ties “mystery shopping” measurement and scoring to industry sales success.

Harley-Davidson was ranked second, with a PSI score identical to the brand's 2013 score, which led the industry last year. Bombardier's Can-Am brand was included in the study for the first time, debuting with a third-place ranking. Industry-wide performance improved substantially from 2013 to 2014, with twelve of seventeen motorcycle brands achieving higher scores.

» View PDF of Article (766.1 KB) PDF Document



Ultimate Motorcycling Ducati Dealers Top 2014 Pied Piper Satisfaction Study

Ultimate Motorcycling
Ducati Dealers Top 2014 Pied Piper Satisfaction Study

May 2014

Two-thousand thirteen was Ducati's first full year under Audi AG ownership. And when the Borgo Panigale manufacturer released its yearly worldwide sales report, record numbers were reported.

This was the second consecutive year Ducati Motor Holding posted record yearly-sales results, and CEO Claudio Domenicali attributed the results to the “strength of our products and the appreciation of the brand.”

The latter part of that quote received some further backing this week when the 2014 Pied Piper Prospect Satisfaction Index (PSI) U.S. Motorcycle Industry Benchmarking Study was released.

The study – which measures dealership treatment of motorcycle shoppers through a process that partly utilizes mystery shopping – ranked Ducati dealerships on top. This was the first time Ducati took the top ranking since 2009.

Ducati, which in March reported having 817 dealers in 88 countries, took a score of 114, which was up seven points over its 2012 results.

Finishing second, three points behind, was Harley-Davidson. Taking the final Pied Piper PSI podium position with 107 points was Can-Am.

The report says either Ducati or Harley-Davidson dealerships led all other brands in one-half of the study's measured sales activities.

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Powersports Business Blog Emotion? Or just going through the motions?

Powersports Business Blog
Emotion? Or just going through the motions?

December 2013

All major motorcycle manufacturers exhibited at the Long Beach Motorcycle Show this year, but while they all started with the same empty show floor, their displays were each very different. Similarly, each manufacturer was assigned the same amount of time — 15 minutes — for a press conference to share their message with gathered journalists, but the presentations were strikingly different.

Some displays and presentations were full of energy and emotion. The subject matter tended to be what the motorcycles would do for the rider — how they would make a rider feel, how much enjoyment the bike would bring to its owner. Some of the presenters were clearly enjoying themselves, too, with a gleam in their eye when they spoke of their products.

In contrast, other manufacturer displays showed companies only going through the motions. Their displays were uninspired, and the press conferences for these manufacturers tended to be company employees talking in a monotone about how one brake disc weighed six ounces less than another. No energy, no emotion; clearly just going through the motions.

Think of the parallels at your dealership. Is a customer who walks into your dealership met with a business that pumps-up energy and emotion? Or are your dealership and the employees who work there only going through the motions? Motorcycling is all about excitement and emotion, since few riders must buy a motorcycle. The most successful manufacturers and dealers understand how important it is to embrace emotion instead of just going through the motions.