A producer of a graphite oil Additive for the car dealership market was taking the company in a new direction and knew they needed to build a much more effective sales organization. They had recently sold their manufacturing capability to focus only on the graphite additive. They were sure it had great long-term potential there.

They had come to us for help because they had a fundamental obstacle: slow sales—very slow sales, in fact. It took six to eight sales calls and more than a year to make a single sale to a single dealer. And the volume was minuscule compared to what they needed to achieve their goals.

They were also concerned because they were selling a pure commodity and believed they were at a serious disadvantage. Could they differentiate themselves from competitors?

After hearing their story, we knew two things.

1. We could help them increase their sales through consultative sales training and revamping their sales process.
2. We had never met a company that couldn’t differentiate itself in a productive way. We just needed to find out how.

That would come from market research and insight into the market. Why, specifically, wasn’t our client getting the sales they knew their product warranted? We suggested that we talk directly to dealers. What was their perspective? Why didn’t they buy a product that made their cars run more smoothly—and their customers that much happier?

The results were eye-opening. The dealers were not enthusiastic about the additive and for good reason. If they used it, they would have to raise the price for a very straightforward task—changing the oil. But if the price increased even a small amount, the dealers said, their customers would find other sources, and there were many other sources. Franchises specializing in oil changes were a special challenge (think Jiffy Lube) not to mention the myriad service stations and other “garages” that routinely offered oil changes along with other service maintenance.

The dealers didn’t see the product as helping them at all. In fact, they were sure it would hurt them. This insight was critical.

We had already observed our client’s sales process. It consisted of talking to service managers while they were multi-tasking in, under, and around cars; dealing with mechanics, and explaining the work to customers. That didn’t leave much time for conversation with reps selling a product the dealership didn’t want anyway. Consequently, the sales success rate was low, and the sales cycle was long and not productive. Eventually, the service manager would buy a case of the additive, but strictly for use on cars that weren’t running smoothly.

We wanted the additive to be used in every car the dealer had—either to sell on the lot or to service in the shop. The graphite product increased lubricity to reduce friction and would, the company assured the dealership, enable a car’s engine to last longer.

We also discovered that the reason winning the battle against the quick change shops was so critical is that a customer who comes to the dealership on a regular basis has a 20 percent greater chance of buying a car from that dealership.

We reported to our client that there was good and bad news coming out of the interviews. The bad news was that dealerships didn’t like the product because it made oil changes more expensive for their customers. The good news was that we learned the high value dealers placed on customer retention: regularly returning customers meant increased car sales.

The solution was not only sales training but also repositioning the product as a key tool for retaining customers—that is, to keep them coming back. We told them we were going to make them a customer retention specialist.

Our client had so much faith in their product that they offered to put a 100,000-mile warranty on the engine at a time when most factory warranties offered much less. The customer just needed to come back for regular maintenance on a recommended schedule. In other words, they kept finding themselves in the dealer’s showroom looking at the latest models. We all know how much fun that is.

The more sophisticated sales process yielded bonus results, too. Prospect meetings moved from service bays and working mechanics into conference rooms with dealership owners, sales managers, and service managers. These executives would be shown the value of buying 40 cases a month and not charging customers for the service. The twin goals were to keep those customers coming back and to sell more new cars to regularly repeating service customers.

Guess what? It worked.

Early in the product repositioning and sales training, I was meeting with our client when a salesperson called in with early results from using the new product positioning and sales process. Instead of the previously typical one-year-one-case sales cycle, the sales rep reported a sale for 40 cases on the first call. Quite a turnaround. The dealer wanted to put the graphite additive into every oil change without additional cost to the customer.

And there was a bonus as a result. Eventually, the dealers developed a new triple-threat program that included the engine warranty as well as towing and tire services. After a customer bought a car, the dealer would invite them to a conference room to explain the new program and also upsell other products and services the dealers rarely had the chance to describe.

The bottom line is that the company was able over the past twenty years to sell a pure commodity, the graphite additive, with strong margins, leading to 20 percent annual growth.

To learn more about how we can help your sales teams think creatively, contact us at 847-446-0008 X-1 or [email protected].