Today, author Tim Kintz is here to talk to me about his new book, Frictionless: Closing and Negotiating with Purpose. Tim is the president of the Kintz group, the automotive industry’s premier sales, and management company. He delivers hands-on coaching, workshops, and presentations to help car salespeople negotiate in this new world of online car browsing and shopping.
In Frictionless, Tim shows readers strategies and techniques for creating win/win negotiations, exceptional experiences for customers, and working from a relational, rather than transactional standpoint. Just to note, for those of you who are not in this industry, I found what Tim had to say in this podcast very interesting, from a buyer’s perspective.
Nikki Van Noy: Tim, thank you so much for joining us on the podcast today.
Tim Kintz: My pleasure, it’s great to be here.
Nikki Van Noy: We’re here today to talk about your new book, Frictionless: Closing and Negotiating with Purpose. This book is written primarily for people in the car business. I’d love to hear from you, what you’ve seen in the years you’ve worked in car sales and how things have changed over the years?
Tim Kintz: I think the biggest change has been the Internet and the information customers have available to them. In the past, they didn’t have the information available. We were working from a complete position of strength and customers were working from a position of weakness when it came to the negotiation.
Now, the Internet and smartphones have leveled the playing field and customers are better at negotiating than they’ve ever been. Therefore, it’s more critical than ever for us to be, as salespeople and managers, to be professional negotiators and to be better than we’ve ever been.
Nikki Van Noy: That makes a lot of sense that technology would create a pretty seismic shift in the industry.
Tim Kintz: Absolutely. We never really recovered after the recession. Meaning, when we had the recession in 08, we were selling out of desperation. We didn’t even know if we were going to have dealerships, let alone make any gross or money on every car deal. We’ve never really recovered and there’s very little effective training or good training out there for salespeople and managers to become good negotiators and that’s what I want to provide them. Negotiating has kind of become a lost art.
Nikki Van Noy: I’m curious. I’m asking this from a buyer’s standpoint. But it seems to me, I’ve noticed at least in my circle that so many people have gone from buying cars flat out to leasing cars. Is that true and if so, has that impacted things also?
Tim Kintz: Yes, in certain markets. There are some markets that are really good at leasing, I have dealerships that lease as high as 92% of the new vehicles that they sell. I have other markets that fight it and resist it because they have a lot of old school thinking and short-term thinking. But with the price of cars, customers are very budget-conscious and budget-focused.
Nikki Van Noy: That makes sense. 92% in some places, that is high. Wow.
Tim Kintz: The funny part is the dealerships that resist leasing, the only leases they typically do are the employees that actually lease the vehicle because they know that it’s not really smart to own a depreciating item.
Nikki Van Noy: Yeah, that makes sense. It sounds like some of this answer may have been embedded in what you’ve already said but I do want to ask you on the nose, what was it that made you want to write this particular book and to write it at this moment in time?
Tim Kintz: Empathy–understanding how hard of a job the salespeople and managers have it today. It’s a grind and we’re in a race to the bottom. It’s almost as if, who can sell the vehicle and lose the most amount of money? That’s not scalable. We can’t stay in business and we’re going to become extinct and dinosaurs if we do not make a profit when we sell vehicles.
Deliver an Exceptional Experience
Nikki Van Noy: You have spent a lot of time coaching other salespeople and I’m curious as you work with people, as you observe the industry, what do you see as some of the places where salespeople tend to falter the most when it comes to negotiating?
Tim Kintz: I think number one is we negotiate out of fear of losing a deal, instead of inspired to make the deal. As I always say, we negotiate out of desperation instead of inspiration. We’re more afraid of losing it than we are inspired to make that deal and make money on a deal.
Nikki Van Noy: How can salespeople start to look at that differently?
Tim Kintz: Develop your skills and understand that the happiest customers are typically the ones that pay the most. Because it’s about the experience. Negotiating isn’t just one little step of the sale. If you’re having a hard time in the last 15 minutes of the deal, the negotiation, then you need to look at the first 15 minutes and what are you doing to deliver an exceptional experience. Are you making the buying process quick and efficient that customers are demanding or are we drawing this out for three or four or five hours to buy a car?
Nikki Van Noy: I am very intrigued by the statistic that the happiest customers tend to be the customers who spend the most. Why is that exactly?
Tim Kintz: Because they got a better experience. Because the salesperson built value. They sold the dealership, they sold themselves, they created mental ownership of that vehicle, they painted that vehicle into the customer’s life, and to the point, that customer wanted the vehicle more than that salesperson even wanted to sell it.
It’s one of the golden rules of negotiating that whoever cares least about a deal wins. Or at least, whoever appears to care least about a deal wins. I need to get that customer licking the paint off the car so much that they can’t imagine not owning that vehicle. That’s when the gross takes care of itself. You make your money during your presentation demonstration. You wrap up the deal in the negotiation and fit the vehicle in their budget.
Nikki Van Noy: I would imagine, and this is me speculating from the other end of the table, but purchasing a car is one of those things that from a buyer’s standpoint, can be very intimidating. I think a lot of people know that they don’t know exactly what they’re looking for, what they’re getting into and obviously, it represents a massive expense. What have you learned through the years in terms of navigating the fears that buyers tend to have when they walk into a dealership?
Tim Kintz: The most important thing to do is understand the customer. You need to understand before being understood. Most customers would rather get sued or have a root canal than go out and buy a car. Because the experience has been so bad for so long and the difference in the past was, customers didn’t really have choices, they didn’t have options.
I could drive 30 minutes to another dealership, but they were going to suck too. Now, every dealership in the country is a click away from buying. We’re not too far off from Amazon. We have Carvana going after us. There are a lot of companies that are going to come along, that are going to give the customer options.
I always use the analogy of our service departments. Years ago, when I got a car business, 90, 95% of all service, repairs and maintenance were done at dealerships. Because you didn’t really have choices. There were not third-party maintenance facilities, Jiffy Lubes on every corner. Now, in 2018, there were 405 billion dollars spent on vehicle repairs and maintenance. 65 billion of that was spent at car dealerships.
Nikki Van Noy: Wow.
Tim Kintz: 340 billion went to third party repair facilities. Why is that? It’s because they now have choices. The perception of going to a dealership to get your oil changed is you’re going to pay more, it’s going to take too long, and the process never really changed. The process in most service departments is the same as it was when I got in the business in 1990.
Service advisors walk around your car, they give it to a dispatcher, hand it off to a technician, customer goes and waits in a little room, drinks stale coffee, watches reruns of headline news and 30 minutes later, they get a list of all the things to fix and they say they’ll do it next time and next time never happens, and now we have about 12% of all repairs and maintenance money that’s spent in America.
Well, we’re at that same tipping point in the sales industry–the sales side of it. The problem is, service didn’t have to change because they can just do more reconditioning on used cars and charge the new car and used car department more money. Dealerships go broke because they don’t sell enough cars and make enough money.
If we don’t change, we’re going to keep losing market share, profitability, and then become a thing of the past.
Nikki Van Noy: Talk to me about what that change should look like in your mind?
Tim Kintz: There’s a long list but number one is like I said a minute ago, there’s understand before being understood. Understand when that customer walks on your lot that they’re guarded. My job is to lower that guard. To give a pattern in a rut. To be different than every other experience they’ve had. Make it about the customer. Empower them.
Talk about the research they’ve done. Get them selling you their vehicle, their trade-in, and when you turn the tables and have them selling you their vehicle, now that customer tells you everything you need to know to be able to sell them, to build value and help that customer, to give them solutions.
Now, you’re going to be able to get the value higher than the price when you present and demonstrate your vehicle. Instead of going from the greeting to your car, which made it all about price, now, we’re interrupting that pattern and making it all about the customer, their vehicle, prior to our presentation.
Nikki Van Noy: That makes so much sense. In your book, you’re talking about establishing relational experiences rather than transactional sales experiences. This sounds like it’s at the crux of what you’re talking about.
Tim Kintz: Absolutely. Because when I spend that first 10 or 15 minutes getting to know the customer, finding about their vehicle, their hot buttons, what really is important to them, now when I go present my vehicle, I don’t have to data dump 50 features and tell them all the cool stuff that I like about the car, I’m able to say, “Remember earlier you were telling me that you’re going to carry a lot of real estate signs and all your kid’s gear and need room in the back? Well, pop that rear hatch, let me show you how much room’s back there.”
Now the customer sees their stuff in it, now it’s theirs, it’s them taking mental ownership. Mental ownership comes before physical or financial ownership.
Nikki Van Noy: It makes so much sense to me that you would have to do that because you’re right, as a buyer at this point you could go online and build your car. I know nothing about cars but I knew a lot about my car before I went in to purchase my most recent car because I had built it online already. So, it makes sense that those tactics would have to be softer because the spec information is largely there right now, so it is making the car their own.
Tim Kintz: Exactly, instead of being a sticker reader the customers already have that. That’s old school. I think sometimes we mistake the volume of features we verbally vomit on them for building value. It is not about the volume of features–it is about the impact on their ownership. It is like if you ever go out and look at a house and have a really good real estate agent and you are walking through it with them and they’re talking about your dining room table and how it will fit.
They are having a conversation with you about the curtains and they’re having the kids pick out their rooms and when you walk out of that house, if they did a really good job, you’ve mentally moved your furniture in that house before you even made an offer on it and now you want that house more than that person wants to sell it.
Nikki Van Noy: Talk to me about this idea of a win-win situation for both parties.
Tim Kintz: You know win-win is a buzz word that’s always around and whenever you hear about negotiating, “We need a win-win.” Okay, a win-win negotiation means we make money otherwise we can’t take care of customers long term and the customer feels like they got a good deal and really, what’s a good deal? Isn’t it a perception? Isn’t it a feeling? It is not a number. To each person, it’s different such as going out and buying a house. You feel good about it.
Whether it was that you needed something that was safe, or your convenience was important, you feel good about the situation. To make them feel like they won, you have to have built-in victories in a negotiation. What are the wins? That’s why I talk so much about the removable objections. What are the wins, so the customer feels like they had little victories throughout the entire negotiation and it is really not just a win-win negotiation?
That is a win-win relationship if you do it right because anybody can sell one car, but it takes a professional salesperson to be able to sell that customer their second, third, and fourth car and all their friends and family in the future and that’s when success happens. That’s when you start making big money in this business.
Nikki Van Noy: Talk to me anecdotally about some of the positive changes that you’ve seen when you’ve gone into dealerships or worked with salespeople and shown them how to begin operating in this new way with this new sales mindset.
Tim Kintz: The ease of doing business and the quality of life they actually end up with. I think the thing that is coolest to me is when I go into a dealership a year after they have been on the process and doing it and they tell me that, “You know what? I made $80,000 last year more than I ever have and it’s because I trusted the system, I believed in it and now my job is a lot easier than it’s ever been, thank you.” You know that’s really what it’s about.
As Zig Ziglar famously said, you can get everything in life you want if you just help enough other people get what they want out of life. When they trust the process and follow it and learn it and repeat it with every customer, success takes care of itself.
Step by Step
Nikki Van Noy: Talk to me about what readers can expect to find in this book, in terms of getting this information from you or you walking them through the process.
Tim Kintz: From literally the history of our business, to understand how we got to where we are, to the mindset you need to have, to the point that the customer says, “Thank you very much for helping us get our new vehicle.” It is step by step with tips, tactics, and steps that they need to be able to execute with every customer that they start talking to. It is not just a bunch of theories. It is not a bunch of, “You should do this and you should do that.” I don’t believe in should-ing all over them. I want to give them the how-tos and specifics on what is going to make them better.
Nikki Van Noy: So obviously some of the listeners for this podcast are not going to be on the sales end of this, they are going to be on the buyer’s end and I’d love you to take a couple of minutes to speak to buyers about things we just might not be aware of or that may not be intuitive. So, for example, what from a buyer’s end is the benefit of going to a dealership, as opposed to some of these emerging avenues that are coming along with technology and this world of Amazon that we live in?
Tim Kintz: I think the biggest challenge with a vehicle is mechanical and they break and who’s going to be there to help you out. Click and buy is great on shoes and electronics that are not very expensive. I think as a customer, they need the confidence that there’s going to be somebody there to take care of them after the sales as well. Look, I own vehicles and the last thing I want to do is go sit in a dealership for an hour and a half to get my oil changed.
Man, I would love to have a relationship with a dealership that was going to call me up and say, “Hey, it is time to get your oil changed, would you like us to pick your car up on Wednesday or is Thursday going to be better for you?” My time is valuable. Time is the most important asset to people. It is the new currency and I don’t have, number one, time to go out and spend four hours buying a car. So, you better streamline that for me otherwise I am not coming into the dealership, I am going to figure out some other way to do it–click and buy.
And number two, I don’t want to go sit there for an hour and a half, so you’d better make sure that when I need service and maintenance that you’re there to help me out, and even though I train and I buy cars from local dealerships around me and they know I am a trainer, I rarely, if ever, have gotten any follow-up. It’s crazy, and I think that when choices are out there customers will take it.
My suggestion as a customer is you find that dealership that believes in the relationship and they’ll take care of you. Look, why do we buy stuff on Amazon? Not because it is the cheapest, there is that unicorn out there that made Google, Target.com and Walmart.com and overstock.com to see if they are getting the best price. Well, for the most part, it’s convenience, it’s easy. That’s what I would expect out of my dealerships when I go buy a car. I want convenience, I want easy and I want service after the sale.
Nikki Van Noy: Yeah. I think you make such an interesting point in there to me that we’ve been talking about the importance of establishing a relationship largely from a sales perspective, but you are absolutely right. That as a consumer having that relationship is incredibly valuable also.
Tim Kintz: It’s everything. It’s in real estate, selling cars, unfortunately, hasn’t been that way. It’s been very transactional. They would just spend a ton of money, do dog and pony shows, wear customers out and just assume they are going to be able to get more customers in. I mean dealerships spend more money to try to pull people from an hour away so they can lose a thousand dollars selling a car to that customer than they do on their own customer base.
Some of these dealerships would fill a dozen stadiums, they have so many customers in their customer base and they do nothing to take care of them. They’re worried about the customer that is an hour away that they are never going to be servicing long term.
Nikki Van Noy: Particularly at the top of this interview, we talked about the state of the industry right now and how it’s been not doing well since the recession. As you work with different dealerships and different salespeople, are you starting to see a dawning awareness that things need to be done differently or do you feel like that awareness still needs to be established?
Tim Kintz: I think the awareness has to be established and we have been doing well as an industry. We have been growing virtually every single year for the last 12 years or so in vehicle sales. A lot of it has to do with the fact that the economy has been great, interest rates are so low that it is easy to get customers approved to get their payments there. If somebody’s got bad credit, the banks have a ton of money that they have to loan out, and we have created a lot of bad habits.
I always say that bad habits perform during good times and good habits perform during bad times. There are a lot of bad habits for them right now and we have gotten weak. I believe more customers come out and buy cars from us than us selling cars and when there’s a pullback, there will be, “Can you sell cars or are you going to be done because you don’t have the volume of people buying cars?” And I think that awareness is becoming more apparent to a lot of dealerships.
I had one dealer that brought me in and said, “We are selling over 300 new cars a month and we are losing money selling those. We have a net loss and I don’t want to lose my volume, but we got to start making some money,” and he straight up said, “Look, don’t come in here and mess up my market share because you said we’re going to start holding some gross.” The good news is a year later they’re up millions of dollars for the year and their volume did not go down.
See sometimes we mistake volume for gross. Look volume is your job, gross determines how well you do it. So, it is not separating those two. They can both be done.
Nikki Van Noy: That all makes so much sense. I mean it is so interesting to hear you say bad habits are formed during good times. I have never heard that before actually, but it absolutely makes sense.
Tim Kintz: It does and there are a lot of bad habits and like I tell salespeople, this is the easiest high paying job you’ll ever have, or it is going to be the hardest low paying job you ever had. It comes down to your skill level and what you are doing to get better.
Nikki Van Noy: So, Tim at the end of the day, what do you hope that readers really take away overall from this book? What is your one big hope?
Tim Kintz: That they believe they can have volume and gross. That they believe that they can help customers, put customers in the best position to be able to trade out of their vehicle every couple of years, if that’s what the customer wants or needs, and to go out there and make more money and have more fun doing it. As I said, it is an easy job when you’re good and you’ll have so much fun. You just have to trust it.
Nikki Van Noy: Perfect. All right, the book is Frictionless by Tim Kintz. Tim, outside of the book, where else can listeners find you?
Tim Kintz: You can go to kintzgroup.com and we have a ton of resources on there @thetimklintz on Instagram and Facebook and LinkedIn, all of the social and we have our YouTube channel too.
Nikki Van Noy: Excellent, Tim thank you so much for joining us today.
Tim Kintz: Thank you for having me.